Take up levels of Bristol city centre offices will reach 800,000 sq ft (74,322 sq m) in 2016, 50% above the five year average of 533,000 sq ft (49,517 sq m), according to international real estate advisor Savills.
Bristol’s office market was driven by demand from TMT, professional and energy occupiers taking space in the city. This influx has resulted in a significant decrease in the supply of city centre Grade A stock, with levels currently at 117,116 sq ft (10,880 sq m). In order to cope with the demand landlords, particularly those with TMT tenants, are refurbishing their offices, with the refurbishment/redevelopment pipeline at an estimated 300,000 sq ft (27,871 sq m).
Christopher Meredith, director in the business space team in Savills, Bristol, comments: “The Bristol office market has benefited from constant interest from occupiers, however Grade A stock is in short supply and the Aurora building is currently the only speculative development in the city. Looking ahead to 2017 we expect to see tenants shift their attention to pre-lets as the Grade A market continues to be constrained and demand for space remains strong.”
Savills notes that as a result of increased demand rental growth has been seen in both Grade A and B stock in Bristol. Refurbished office space is now reaching rents of £27 per sq ft (£291 per sq m) in Grade B stock, just below the headline rent of £28.50 per sq ft (£307 per sq m). It is predicted that in 2017 rents on Grade A space will reach and exceed £30 per sq ft (£323 per sq m).