Bristol’s booming office market has expanded beyond the city centre with take-up figures for the first quarter of 2017 revealing an increase in out-of-town demand.
James Preece, national offices director in the Bristol office of Colliers International, said: “The shortage of supply in the city centre has seen the number of transactions fall, however this has been countered by a significant improvement in occupier demand out of town.”
“The Bristol office market has started 2017 in a good position, with take up around the five year average. With good levels of demand including a Government requirement for 250,000 sq ft, rental levels are forecast to continue rising.”
Recently-released statistics for Q1 Bristol offices take-up show a total of 126,000 sq ft in the city centre, which is 7% below the five year average for the first quarter. Take up out-of-town for the same period totalled 90,000 sq ft – marginally up on the 5 year average and 20% up on this time last year.
He added: “There are currently a large number of deals under offer that did not manage to creep into Q1, so the statistics are expected to improve as the year progresses.
The Q1 take-up figures show that the three largest deals in Bristol city centre were all owner occupier purchases, with the biggest being the University of Bristol’s purchase of the 32,000 sq ft Augustine’s Courtyard.
In addition to the University of Bristol, the TMT (Technology, Media and Telecommunications) sector also played a large part in the first quarter and was responsible for 38% of city centre take up.
“The shortage of supply in the city centre does certainly appear to be having an impact on take up levels,” said Mr Preece.
“In contrast to the city centre, there were 40% more transactions out-of-town compared to the same period last year.
“There were three deals over 10,000 sq ft, with the largest being Boeing taking 18,000 sq ft at 435 Bristol Business Park.
“There has been an increase in larger out of town requirements in March, and as in the city centre there are also a good number of deals under offer.”
Mr Preece added that the aviation sector was responsible for almost 30% of out-of-town take up in Q1, with a diverse range of other sectors also contributing including financial, construction and TMT.
The Q1 figures show that Bristol city centre Grade A rents remain at £28.50 per sq ft with Grade B quoting rents averaging £25 per sq ft.