Healthy level of demand in Bristol’s office market

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The Bristol Office Agents Society take-up figure for Bristol’s city centre in Q2 2017 was 141,670sq ft. This is 12% higher than Q1 but below the 5 year average, which is not surprising with two record years of take-up in the last three. There are sustained high levels of demand for a variety of space and we expect several occupiers to make decisions before the end of the year.

The largest deal in the city centre this quarter was the letting of 13,671sq ft of first floor space to Jordan’s, at Orchard Street’s Temple Back. This deal, along with the letting of 5,995sq ft of ground floor space to Mott Macdonald, an existing occupier of the building, means that the building is now fully let.

Grade A take-up has remained steady with a further 33,000sq ft of space being taken out of the city centre market this quarter. With only one new development under construction and one grade A refurb being brought to the market later this year, we await the impact of ever reducing supply on the development pipeline.

Bristol’s out of town take-up was at a similar level to this time last year, at 58,999sq ft. There were only two deals over 10,000sq ft this quarter – Biz Space’s purchase of 17,891sq ft at Equinox South for their use as serviced offices and the letting of 14,325sq ft at Concorde House to YTL Property Holdings.

Although take-up has been slightly behind the 5 year average, there are several suites, both in the city centre and out of town, that are known to be under offer; although they are taking time to complete, we expect to see these lettings cross the line next quarter. There has also been an increase in enquiries and viewings since the election, and several of these tenants are expected to move by the end of the year. This should boost take-up for the second half of the year and we expect 2017 overall to be in line with average figures.

CBRE’s Peter Martin commented: “For the half year, the combined city centre and out of town take-up totalled over 416,000 sq ft which reflects the good level of enquiries from the beginning of the year. We forecast that demand will remain strong for the rest of 2017 and beyond.”

James Preece of Colliers International added: “There has been a significant jump in the number of deals completed in the city centre, quarter on quarter, albeit in the sub 10,000 sq ft size range. To reach this level of take-up with no deal above 14,000 sq ft is a good indication of how robust the market remains. The first half of the year overall in Bristol is broadly in line with the five year average, so there is no surprise that investor appetite is still strong.”