Bristol Office Agents Society has announced that take-up for the Greater Bristol market in the third quarter of the year was 283,458 sq ft – the strongest quarterly demand for the year to date. Following a good first six months, demand remained strong in both the city centre and out of town markets.
The city centre has seen a third quarter take up of 166,829 sq ft – the largest quarterly take-up for the year to date, and ahead of the five-year average. The market saw four deals in excess of 10,000 sq ft cross the line, the largest of which was Parmenion Capital’s acquisition of 31,233 sq ft of 3rd and 4th floor space at Cubex’s recently completed Aurora. Other major deals in the city centre include the letting of Unum House (28,732 sq ft) to Desklodge; Maggs House (23,103 sq ft) to Bristol University; and HM Revenue and Customs taking 13,817 sq ft of additional space at The Crescent Centre.
The city centre also achieved a new record rent, with Amdaris’ acquisition of a self-contained ground floor suite of 3,194 sq ft at Aurora for £34.50 psf. Supply levels remain low across all grades, but this is particularly the case in the grade A market which has seen a further 46,235 sq ft taken up this quarter, leaving supply levels at an all-time low. However, Q3 has also seen the start of some very welcome speculative development, with Royal London commencing work at The Distillery, a scheme which will provide 92,000 sq ft of flexible space, and AXA / Bellhammer announcing that they will start speculatively developing Building 1, Assembly, a grade A building of 200,000 sq ft, before the end of the year.
Out of town
Bristol’s out of town office market also performed well in Q3, recording a total take-up of 116,629 sq ft. This market benefited particularly from a number of larger deals, five of them in excess of 10,000sq ft. The largest of these was Edvance’s acquisition of 30,670 sq ft at the newly refurbished 800 Aztec West. Others include: IVC taking further space at The Chocolate Factory, Keynsham (16,931 sq ft); Renishaw taking 1 – 3 Ashville Park (10,418 sq ft); the NHS acquiring Park House (10,042 sq ft); and BUPA taking Severn House (10,000s q ft).
Phil Morton, of Morton Property Consultants, commented: “Following a strong first nine months, there is every indication of a positive last quarter – to make 2018 a year when a lot of negative market expectations because of Brexit were overturned. The record rents being achieved against a background of low supply and strong demand have helped spur on new development, and that will release much-needed new quality stock into the system. Bristol is riding out the economic uncertainty, helped by a broad-based economy and a sound supply and demand situation – allied with many sectors here doing extremely well… not least TMT, which is driving a lot of the activity. Everywhere you look there are clear signs that Bristol occupiers and developers have turned their back on Brexit and are focusing on business as usual.”
Chris Meredith, Savills’ Office Agency Director, added: “Both the Bristol City Centre and Out of Town office markets continue to go from strength to strength in terms of both take up and rental growth. The City Centre has experienced several large lettings this quarter alongside the usual steady pace of sub 10,000 sq ft lettings, providing a boost to the figures. The established business parks out of town continue to attract new occupiers with the third quarter seeing several large deals, pushing volumes to reach over 100,000 sq ft.”