Acute lack of office space impacting Bristol market

Andy Heath, Partner and head of Bristol office agency at Cushman & Wakefield

Office take-up in key regional cities reached 1,313,302 sq ft in Q2 2017, close to the quarterly 10 year average with the outlook for the second half of the year looking promising, according to Cushman & Wakefield.

Key deals in Manchester and Edinburgh including the Government Property Unit’s (GPU) 189,000 sq ft pre-let in Edinburgh, where Q2 take-up reached a record breaking 423,000 sq ft, and WeWork taking 55,800 sq ft at No. 1 Spinningfields, helped to boost take-up figures and maintain average performance.

In Bristol, city centre take-up reached 141,670 sq ft, the lowest quarter since Q2 2015 and below the three and five year quarterly average. The largest deal of the quarter was law firm Jordan’s acquisition of 13,600 sq.ft at Templeback which was acquired by Cushman & Wakefield who also jointly advised the owner, Orchard Street.

Overall availability in Bristol city centre currently stands at just 519,405 sq ft, approximately half the total amount of supply three years ago with grade A availability at its lowest ever total.

Andy Heath, Partner and head of Bristol office agency commented: “Whilst it was a steady Q2, in the last three to four weeks we have seen a sudden upturn in named demand and have one of the highest levels of active demand of any regional centre in the UK. This, coupled with the acute lack of supply/development pipeline, we anticipate some interesting activity in the next 6-12 months.”

Scott Rutherford, Partner and National Head of Offices at Cushman & Wakefield said: “Political uncertainty has dampened occupier confidence in some cities and this has been reflected in a slowdown in enquiry levels in Q1 and Q2 2017.

“We have seen a resurgence in larger scale enquiries from both the professional and business service sectors and also the finance sector which is a significant improvement on the last four quarters. This, combined with the upcoming GPU activity in Birmingham and Leeds following last quarter’s deal in Edinburgh, will have a significant impact as supply is tight across all of the regional office markets without exception.

He added: “In addition to increased take-up, we are seeing rental growth across a number of regional cities with occupiers increasingly looking to those offering flexible and high skilled labour markets.”

Cushman & Wakefield has collated data on office take-up in Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Manchester and Newcastle city centre markets.