The Bristol office market has continued to demonstrate its resilience and has already reached the levels of take up seen for the whole of 2020 and 2021 in just three quarters so far this year, reports the Bristol Office Agents Society. Strong activity, in both markets means that the city centre and out of town will be ahead of the 5-year average take up figures by the end of the year.
Bristol’s City Centre market saw 26 further deals complete in the third quarter with an average deal size of 5,046 sq ft, and a healthy total take up of 131,197 sq ft. This is the highest take up for this period in the city centre since 2018 and shows that the market is continuing to perform well despite ongoing economic uncertainty.
There has been 3 lettings over 10,000 sq ft this quarter, the largest of which is WECA’s acquisition of 19,817 sq ft at XLB’s newly refurbished 70 Redcliff. In addition to this Canada Life have committed to 13,260 sq ft of space at Royal London’s Distillery and Jump have signed to take 11,903 sq ft at L&G’s Redcliff Quay.
Headline rents in Bristol City Centre are now the highest of the Big Six and remain stable at £42.50psf, with incentives also at a low level. ESGs and wellbeing are now at the forefront of most acquisitions and tenants are prepared to pay for buildings that can offer these.
The out-of-town market has seen a strong third quarter with take up of 82,220 sq ft. With 10 deals crossing the line the average deal size for this market has increased to 8,222 sq ft, and shows a promising return of larger deals. The largest of which was a letting of 21,568 sq ft at Pavilions, along with a subsidiary of BAE taking 15,917 sq ft at Filton 20 and You Health acquiring 14,090 sq ft at 1400 Parkway North.
The development pipeline remains strong, and this quarter has seen construction start on site at Candour’s The Welcome Building, which will provide 206,409 sq ft in 2023. Comprehensive refurbishments have also started at V7’s 100 Victoria Street, L&G’s North Quay House and APAM’s One Friary, which between them will provide 144,000 sq ft of Grade A space over the next 12 – 24 months.
Phil Morton, Director at Morton Property Consultants commented “The two-tier market between offices with good ESG credentials and those without will continue as aspects like carbon footprints increasingly become tender requirements. The premium rents possible for the right space is now the driver for forward-looking landlords to develop and refurbish to the standards clients expect, while occupiers view the space they occupy as a powerful HR asset rather than a fixed cost liability.”
Savills’ Office Agency Director Chris Meredith added; “The Bristol office market has been extremely buoyant this year, with Q1-Q3 take up trending as one of the strongest on record. Demand continues to be focussed for the best-in-class office space. The office has not only become an important tool to attract workers back to the office but also to encourage collaboration, support wellbeing and provide employees with the best experience whilst in occupation. There is a lack of this Grade A stock in the market and so it’s encouraging to see new constructions and refurbishments commence to feed this demand which has seen rents increase to £42.50 this year.”