Bristol’s economic future is looking bright, thanks to the growth in the technology, media and telecommunications (TMT) sector, according to national property consultancy Lambert Smith Hampton (LSH).
The city, with neighbouring Bath, already has more than 36,000 employees in the industry. The fact that it has been identified as a key ‘Tech City’ by Tech Nation 2017 will see more digital businesses flocking to the region, says Peter Musgrove, head of office at LSH Bristol.
He said that because Bristol is also recognised by Centre for Cities and McKinsey & Company as one of the two globally significant digital tech clusters in the UK, the city has cemented its reputation as a place for innovative businesses.
However, Peter warned that there is an increasing squeeze on available space, with take-up and enquiries for offices, both in the city centre and out of town, continuing to be high.
“There is continued pressure on the supply of office space in the city centre market, especially in the grade A market, and while the out of town market is not under the same level of pressure there is still a lack of quality space available to market,” he said.
“Several firms have been out viewing available space but with an ever-reducing supply of stock they are facing a limited choice. Many enquiries have been in the market for some time, and they will need to make a decision to take space before availability is reduced further.
“I firmly believe that once one firm decides to make their move, there will be a domino effect and a lot of space will be removed from the market at the same time.”
He said the case for development in Bristol and wider area is “compelling” because the construction of the 95,000sq ft of Grade A office space at Cubex’s Aurora, which will be available early 2018, remains the only speculative development in the market.
“Other buildings, such as Castleforge’s One Cathedral Square, are being fully refurbished to provide Grade A space later this year, but with very few other developments in the pipeline, the case for development is compelling,” added Peter.
“Prime rents are due to break through the £30.00psf barrier on a couple of deals which are now under offer. Given the lack of available space in the market and the maintained levels of demand, we expect prime rents in the city centre to continue to push to record levels later this year.”
Office take-up in the Bristol region in Q1 was 216,093sq ft, which is down on the same period last year, but in line with the five-year average. The out of town market was also in line with the five year average with a total take-up of 89,774 sq ft.