The Bristol city centre office market outstripped expectations in Q3 2017, with transaction levels jumping by nearly a third on the same period last year, national property consultancy Lambert Smith Hampton (LSH) has announced.
In its latest Bristol Office Pulse, a quarterly report on demand, take-up and supply, LSH reveals that the total take-up of offices in the city centre in Q3 was 173,022 sq ft. This is an increase of 28% on the same period in 2016, which saw 61,656 sq ft of take-up.
Bristol’s out of town office market performed particularly well in the third quarter of this year, LSH said, with take-up levels of 131,256sq ft across 23 deals – which represents an increase of 112% on the same period last year and well above the 5 year average.
Commenting, Head of Office Agency at LSH Bristol Peter Musgrove, said that robust demand had led to continued pressure on availability in the city centre, and that firms looking for larger office space were now facing increasingly restricted choices.
“Several deals that were in the pipeline for some time have now crossed the line, and we have seen a lively quarter of office take-up in both the city centre and out of town markets – this just goes to show the continued strength of demand for demand from occupiers despite wider economic uncertainty.”
“Perhaps the most anticipated deal was Mewburn Ellis’ acquisition of 13,326sq ft of first floor space at Cubex’s Aurora, the city’s only speculative development,” Peter said.
“Not only was this the first deal at Aurora, it also broke record rent levels with a rent in excess of £30 per sq ft. We expect to see most, if not all of the building, let before practical completion in quarter two next year.”
This quarter also saw the completion and launch of Castleforge’s One Cathedral Square, which brought 58,000sq ft of fully refurbished grade A space to the market, although this is likely to be let before the end of the year.
Elsewhere, works at Resolution Property’s Programme are well underway, the report highlighted, with phase one due to complete later this year and phase two in 2018. The building will provide 110,000sq ft of space to the TMT sector which remains popular in the city centre with many new start up choosing to locate in Bristol.
In total, the combined city centre and out of town market saw a combined take-up of office space (over 1,000 sq ft) of 304,278sq ft in Q3 2017, LSH’s Pulse report stated, a 33% increase on the 5 year average of 228,534sq ft.
The shortage of future space remained a particular challenge for the Bristol market, Peter said. “With less than one year’s grade A supply of office stock in the pipeline and nothing new under construction, there are concerns that there will be a severe lack of supply in the next two years. The risk is that this will deter occupiers looking to expand or relocate within Bristol.”