The Bristol office market has continued in its success attracting a high level of demand, with take up for the whole market at its highest annual level since 2017, reports the Bristol Office Agents Society.
What makes this more interesting is that the fourth quarter saw the out-of-town market have its strongest Q4 take up in four years and shows renewed activity following the COVID-19 pandemic. The city centre market experienced a more subdued end to the year, but this was perhaps to be expected following strong take up earlier in the year.
Bristol’s city centre market saw 29 deals complete in the final quarter with an average deal size of 3,832sq ft, and a quarterly take up of 111,130sq ft. This gives a total annual take up in the city centre for 2022 of 620,211sq ft, the strongest annual take up since the COVID-19 pandemic and ahead of both the 5- and 10-year averages.
In the city centre, quarter four saw only one deal in excess of 10,000sq ft which was EPICs expansion into a further 13,141sq ft at Hartwell House. The remainder of lettings have been smaller but there has been an increased number of deals between 4,000 and 10,000sq ft which has bolstered the overall figure.
Headline rents in Bristol city centre have increased 11% through 2022 and remain the highest of the Big Six at £42.50psf. In addition to this, incentives remain at a low level and these trends are expected to continue as tenants continue to seek, and are prepared to pay for, high quality space.
Whilst several developments are on track to complete in 2023, the number of new developments that started on site through 2022 was less than 2021 so supply remains quite tight. Candour and Tristan Capital are on site with the speculative development of 207,000sq ft at Welcome Building on Avon Street and whilst other sites have recently secured planning they have not yet started on site. There have however, been several comprehensive refurbishments that have recently started on site, including V7’s One Hundred, Victoria Street and L&G’s North Quay House, which will provide circa 85,000sq ft of grade A space to the market through 2023.
The Bristol out of town market experienced its strongest final quarter take up since 2018 with a figure of 109,191sq ft, to bring the annual total to 340,158sq ft, which is also the strongest out of town annual take up since 2018 and is ahead of the 5- and 10-year average annual figures. Quarter four saw 22 deals cross the line, which is the most active quarter of 2022, and gives an average deal size of 4,963sq ft. The largest of these lettings was Babcock’s subletting of 39,694sq ft at 100 Bristol Business Park to a confidential sub-tenant.
Simon Price, Partner at Alder King commented “2022 saw another very strong year of take-up in the Bristol office market boosted by the city’s attraction to a diverse range of occupier sectors. With ESG credentials and building amenities now at the forefront of many occupiers’ search criteria the very high quality of the new developments and refurbishments already underway in the city bode well for another strong year in 2023 in terms of take-up and further rental growth.”.
Avison Young’s Office Agency Director Paul Williams added; “As the office market continues to emerge from the effects of national lockdowns and react to new ways of working, the take up figures demonstrate just how resilient the office sector is with developers and landlords delivering the high-quality accommodation and range of amenities which occupiers are now seeking. It is particularly encouraging to see the recovery in the out-of-town market which has been slower to pick up but is now also performing strongly, and the figures overall give every reason to be optimistic about the prospects for the coming year.”