Improved headline rents and take up for Bristol Office Market

CEG have secured an additional 3 occupiers at the recently completed EQ

Office take-up in Bristol for the second quarter of 2024 has remained consistent, leaving H1 some way ahead of figures for the same period last year, according to the latest data from the Bristol Office Agents Society (OAS). Both the city centre and out of town markets have seen take up in line with overall quarterly averages and ahead of average take up figures for quarter 2.

Bristol’s City Centre market saw 29 deals complete in quarter two with a total take up of 126,056 sq ft, to bring the total for the first 6 months of the year to 253,035 sq ft. This is just below the five-year average, but when compared to the same period last year shows a 58% increase, which demonstrates that there is increased economic confidence and occupiers are committed to taking office space.

The largest deal of Q2 has been a 20,365 sq ft letting at One Temple Quay. Further large deals include Ridge and Partners commitment to grow within Picton’s Tower Wharf, where they are expanding into 13,559 sq ft, and furthermore CEG have secured an additional 3 occupiers at the recently completed EQ; Rathbones are committed to 12,000 sq ft, Birketts Law to 7,390 sq ft and Knights have signed to take 6,017 sq ft.

These lettings, along with deals secured at 10 Victoria Street, Assembly and One Hundred are all indicators that there is a continued trend towards high quality space in the city centre and occupiers continue to seek grade A space. This trend, when matched with reducing supply, has meant that tenants are prepared to pay for quality space and headlines have increased again to now stand at £48.00psf – the highest rent of any of the UK’s big 6 cities.

Current levels of supply remain low in the city centre with Tristan Capital’s Welcome Building, and APAM’s One Friary being the only new build schemes which are on site and under construction. Several schemes have recently PC’d including CEG’s EQ, AXA / Bell Hammer’s Assembly and Umberslade’s Cargo Work, but all have secured tenants and have strong interest in the remaining parts so are not expected to be available for long. Whilst refurbishments are helping to provide space in the meantime there are concerns around where future supply will come from and when will it be available.

The out-of-town market also performed well in quarter two with 77,330 sq ft of take up from 10 deals. The largest of these was Sirona Care and Health signing to take 20,420 sq ft within South Glos Council offices in Yate. There has been a reduced number of deals in the out of town market so far through 2024 which shows a continued trend for occupiers to seek better quality space and generally want to benefit from the amenities that the city centre has to offer.

Chris Howell, Director at Howell Commercial commented: “Office take-up remained steady at just over 200,000 sq.ft. across the conurbation this quarter. CEG’s ‘uber prime’ EQ on Victoria Street accounted for 20% of space committed to in the city centre driving prime headline rents close to £50psf. Like many sub-markets vacancy rates are rising but the reinvention of grade B stock continues at pace, which is testament to the underlying strength of the City’s professional and technology sectors”.

JLL’s Director of Office Agency, Ian Wills added: “The number of transactions in Q2 is in excess of pre-covid levels which is really encouraging. It is also fantastic to see companies like Ridge & Partners and Great American Insurance growing, the later increasing their office space threefold”.