Office take up in Bristol for the first half of 2023 has been subdued across both the city centre and out of town markets, reports the Bristol Office Agents Society. Both markets have seen take up below their 5- and 10-year averages however there remains healthy levels of demand for good quality space and occupiers remain committed to offices in the city.
Bristol’s City Centre market saw 22 deals complete in quarter one with a total take up of 82,694 sq ft, and a further 20 deals complete in quarter two with a take up of 66,050 sq ft to bring the total for the first 6 months of the year to 148,744 sq ft. Whilst this is behind the 5 and 10 year average it is partly to be expected due to economic uncertainties in the second half of 2022 having a delayed impact on take up this year. There are a number of deals in the pipeline for the second half of the year, and with over 300,000 sq ft in solicitors’ hands and due to complete this year it is expected that 2023 will return to the average take up figures.
The largest deal of the first 6 months of the year was The Nelsons Trust freehold acquisition of 12,169 sq ft at Protheroes House, followed by Michelmores’ acquisition of 11,371 sq ft at Northwood’s recently refurbished 10 Victoria Street, and the letting of 11,054 sq ft at CEG’s EQ to HSBC.
Whilst there has been an absence of larger lettings during this period these deals are all indicators that there is still good demand for high quality space in the city centre and occupiers continue to seek grade A space which can meet their expectations. Headline rents in the city centre have remained stable at £42.50psf and we continue to see strong demand from a variety of occupiers who are now realising that they need to consider their office needs moving forwards.
Current levels of supply remain low in the city centre but there are several developments now well underway and due to complete in the next 12 months, including CEG’s EQ, AXA / Bell Hammer’s Assembly B and C, and Tristan Capital’s The Welcome Building. In addition to these, comprehensive refurbishments at 100 Victoria Street and North Quay House are also set to bring high quality space to market, and Credit Suisse have also now pushed the button to start works to fully refurbish 3 Rivergate.
The out of town market also saw a quiet start to the year with 85,172 sq ft of take up in the first 6 months of the year from 18 deals. There has been a lack of larger deals in the market during this period and this has led to take up falling below the 5 and 10 year averages. However, with numerous requirements in the market this is also expected to improve during the second half of the year. Rents have remained stable, but of note in this market is the comprehensive refurbishment of CEG’s 1000 Aztec West which is on track to complete later this year and will provide a net carbon zero HQ building with wellness as the key focus and it is expected to set new headline rents.
Rupert Elphick, Associate Director at BNP commented: “Whilst take up for the first half of the year is down, there are some big existing requirements still yet to be fulfilled from companies with approaching lease expiries seeking new best in class accommodation. This is likely to build on the deals already in solicitors hands and help drive take up for the second half of the year. This ambition for best in class comes from companies looking to align their real estate strategy with their ESG targets and ensure good staff retention and high level recruitment”.
Burston Cook’s Director of Office Agency, Finola Ingham added: “there is still strong demand for office space in the city centre, but what is apparent is that occupiers have become more focused on providing higher quality office space in order to attract and retain staff. It is also interesting to note that the most active sector of the market, and where the majority of deals were transacted during the first two quarters of the year, were from companies taking space of sub 5,000 sq ft in the city centre”.
