There are real reasons to be optimistic about the Bristol office market following marked signs of improvement over the last quarter, according to one of the leading property experts in the city.
Phillip Morton, Head of Agency and Development at CBRE Bristol, said the firm’s latest quarterly report has revealed a 50 per cent increase in the take up of offices compared to the same period last year.
The biggest deal in the city over the three months to the end of March was the announcement that Bristol City Council has purchased 100 Temple Street. The local authority will be using the vacant 70,000 sq ft offices for its own staff as part of a major reshuffle of its property portfolio across the city.
However, there have been no further announcements made regarding the city centre’s two largest office blocks at Temple Back and Bridgewater House within the Finzels Reach development on the former Courage Brewery site.
Perhaps most important of all, the first speculative development in Bristol since the start of the recession in 2008 was announced. Developer Salmon Harvester is due to speculatively build the 90,600 sq ft office block 2 Glass Wharf at Temple Quay.
The building next door to law firm Burges Salmon was put on hold in 2008, but with planning permission already in place and the ground-works completed the scheme is due to be completed within 18 months. When constructed, it will increase office supply by around 25 per cent in the city centre.
Philip Morton said: “The fact that a major speculative scheme is taking place in Bristol has to be a good sign for the property market. Salmon Harvester must be confident that there is demand for Grade A office space otherwise they would not be pressing ahead with the scheme. There are signs that demand is returning for top quality offices which has to be a good thing for the market as a whole in Bristol.”
However, the picture is not as positive when it comes to the out of town office market. Although take up was 81,650 sq ft, it was still down by just under a quarter at 23 per cent compared with the same period last year.
Nevertheless, there was a major boost for the market with a large deal by Nvidia at 930 Aztec West for 30,450 sq ft of office space. Meanwhile, a freehold purchase of the 25,500 sq ft building 300 at Aztec West by Spire Healthcare will result in the office building being converted for new use.
Philip Morton said: “Ironically the out of town market has been more robust in recent years as a result of the fact that it has been much more competitive. The market is still very price sensitive but there is some evidence that demand is returning for Grade A office space in prime locations.”
