Office sector analysts at Colliers International are predicting flatlining city centre take-up will begin to rise by the end of the year.
National offices director James Preece said the large number of enquiries being processed this summer should result in improved performance by the beginning of 2013.
He said: “Overall the office market has not performed as well as the first half of 2011 with take-up around 13 per cent down at 338,757 sq ft. The City Centre has struggled with a lack of large and Grade A transactions, whilst the out of town market is currently on a par with the first half of 2011.”
City Centre Q2 take-up is roughly the same as Q1 at 96,152 sq ft, but up 18 per cent on the same quarter of 2011.
There were just two transactions above 10,000 sq ft in Q2, the long leasehold sale of 53-55 Queen Charlotte Street (23,077 sq ft) to Foscombe and the freehold sale of Trelawney House, Surrey Street (20,785 sq ft) to Bristol Rental Properties.
The only Grade A transaction was the letting to Towry Law of the part third floor of Portwall Place.
James Preece said: “The City Centre continues to be dominated by sub 5,000 sq ft transactions, which made up 82 per cent of the deals in Q2.”
Grade A quoting rents remain stable due to a relatively low level of supply at £27-£28 psf but with attractive incentives available still.
Good Grade B rents are around £18-£20 psf, with lower Grade B at £10 psf.
Meanwhile out of town take-up totalled only 46,894 sq ft in Q2 2012, down 55 per cent on the previous quarter and down 40 per cent on the same quarter of 2011.
The largest out-of-town letting was Jelf Group agreeing a new lease on Hillside Court, Bowling Hill, Chipping Sodbury (24,350 sq ft).
“The out-of-town market has also been dominated by sub 5,000 sq ft transactions, which made up 91 per cent of the take-up. There were no Grade A deals in Q2.”
He concluded: “The Bristol office market reflects current economic conditions being slower than the first half of 2011. The City Centre has been most affected due to a lack of large deals and grade A transactions. The out-of-town market is behaving in a similar way to the start of 2011 in terms of overall square footage transacted, however there is still a lack of large transactions here as well.”