In cities like Bristol, more and more businesses want to be based in our city centres while out-of-town locations lag behind. So, is it time for our business parks to incorporate some of the features that make a central location attractive? By Andrew Hardwick, Director of Williams Gunter Hardwick:
Like everything else in a market-driven economy, business space must adhere to the laws of supply and demand. The more people want of one sort of space, the more competition there is from occupiers, and the higher the rent it can command.
Bristol is a prime example. At present, Grade A Office space in Bristol is being quoted at £35 psf. The “out of town” market – primarily North of the city – is commanding a good £10 less than that. The gap between the two has never been greater.
Even second-hand space in the city centre is currently being let at rates considerably higher than new out-of-town space.
At the same time, availability of space in the centre is down to 3.0%; out-of-town, 7.0% is available.
The reason is simple: many employees of modern businesses want to work as well as live in the centre. It’s easier, more interesting and more stimulating. Over the last few years, Bristol has become a seriously attractive place to be. Its central area is buzzing – and pulling in new occupiers at an exceptional rate… lively, new tech companies employing a new breed of skilled young worker. To attract talent, they need to be in the centre.
Yes, there will always be some companies who need to be close to the motorway junctions for logistical reasons. But for their staff, that’s not always convenient. Many people today are opting to not even bother owning a car – spurred on by the fact that the properties they own or let don’t even have parking spaces. Who wants to spend an hour or more each day trekking to work on public transport which doesn’t always go close to where they want to go?
So, is this the end of the out-of-town business park as we know it?
Well not quite, but it is something of a wake-up call. And doing “something” is important. Importantly, with rents relatively low, there is little incentive for developers to invest in new stock.
A continued drift in popularity would have huge implications for our local economy as well as building up unsustainable demand for the city centre space we do have available – making accommodation there prohibitively expensive.
I spend part of my time acting as a judge on behalf of the British Council for Offices. This allows me to see the very best (and worst) of what is happening in the world of business space beyond our own city region. And there is a lot that Bristol can do to reverse the trend.
In short, we need to make our out-of-town parks more like our city centre.
What makes a city centre location attractive is that it’s not just about employment space. People live, shop, eat, drink, socialise and get entertained here too. The buzziest parts of Bristol are “permeable” – they have different occupational uses cheek by jowl, so you can pop out at lunchtime and enjoy a huge range of international foods, or drop into a coffee bar in the afternoon to hold a meeting or get some thinking time. You can find an hour for the gym before or after work.
Where you live is probably a short walk over the river, and if you want to get to a meeting in London, the station is on the doorstep. If jogging is your thing, there’s a riverside run before you start of the day. Clock off in the evening and there are great bars to chill in and meet up with friends or work colleagues. What’s not to like?
Meanwhile, on most of our business parks you’re lucky if there is a corporate hotel or pub to meet a business contact or a packed Starbucks to break the monotony of a soulless lunch hour.
To meet the aspirations of today’s business occupier, places like Aztec West, Bristol Business Park and Parkway need to learn from employers like Facebook at their 22-acre Menlo Park HQ, where – amongst the huge office complexes – there are places where people can go to refresh their minds and bodies.
Business parks should become far more mixed use, with retail outlets, gyms, cafes and restaurants. There’s even a strong argument that more housing could be added to the mix.
I appreciate you can’t suddenly reinvent a business park overnight… these things take time. And having enough critical mass helps too. But with so much new housing going up in North Bristol, even providing cycleways through to the business parks would be a start, along with better connectivity to places like Cribbs Causeway for those who aren’t able to get there by car.
Critically, the next generation of business parks in the city region need to adopt the lessons of the most successful parks worldwide and design in the features that will woo a modern occupier.
The payoff for developers and investors? Rents that start to match those currently commanded in the centre. As ever, the laws of supply and demand will prevail.