Bristol city centre take-up reached an average level of 113,000 sq ft in Q3. The largest deal was for 12,000 sq ft of grade B space to SDL at The Pithay. The remainder of transactions were mainly for grade B and C space in units of around 5,000 sq ft or below.
There are a reasonable number of requirements in the market for city centre office space. However, the general sentiment is that enquiries are taking longer than usual to translate into deals due to ongoing occupier uncertainty. Investor sentiment in the regional office markets continued to be subdued in Q3.
Annual take-up for 2012 will reach approximately 420,000 sq ft, similar to 2011. An increasing proportion of grade B take-up is expected, following a return from the mid-sized professional and media sectors.
Total city centre availability decreased marginally this quarter due to lettings activity. There is a shortage of supply of grade A space in the city centre as well as a lack of demand, only four grade A deals totalling 31,000 sq ft have transacted so far this year.
Prime headline rents were unchanged at £27.50 per sq ft in Q3 and will not increase until 2014 when the limited development pipeline means that the lack of well-located grade A options becomes more of a significant issue.
Andy Heath, Director, DTZ in Bristol comments: “Bristol continues to show signs of very positive activity but along with all the other regional centres, it is slow moving. The dynamics of the market are still strong with limited availability, especially at grade A level and there is evidence of emerging strength in demand from the TMT (Technology, Media and Telecommunications) and more recently the financial services sector, correlating with the current trends in London and the South East. When the market does show continuous signs of resurgence, Bristol is one of the best placed regional centres to take advantage of this.”
