Bristol city centre office take-up was slightly down in the third quarter of this year with year-to-date figures also down on the same period last year, according to research released by property specialists Knight Frank.
Quarter Three take-up was 70,000 sq ft, compared with 81,000 sq ft in the previous quarter. A total of 311,000 sq ft of office space was taken during the first nine months of the year compared with 356,000 sq ft for the same period in 2010, the Knight Frank Regional Market Office Presentation reveals.
Tony Nicholas, head of the Bristol office of Knight Frank, said: “Full year take-up is unlikely to reach the 459,000 sq ft recorded in 2010, which itself was a below average year. Also there has been a marked decline in the volume of active searches – down from 364,000 sq ft in Quarter Two to 318,000 sq ft in the last quarter. Like other major cities, the recent UK economic slowdown is evident in the Bristol office market.”
Headline rents remained steady at £26 per sq ft with net effective rents unchanged at £19.50 per sq ft. However deals in the pipeline point to an increase in headline rents to £27.50 per sq ft in Quarter Four.
Tony Nicholas added: “Market churn is progressively shifting the balance of supply towards lesser quality space. Grade A supply fell to 274,000 sq ft in Quarter Three, down 18 per cent from a year ago.”
On the investment front, Q3 investment turnover was £497m outside London and the South East, an improvement on Q2 but nevertheless 38% below the 10-year quarterly average.
Bristol investment partner Steve Oades said: “In addition to the restrictions on debt availability, a major barrier to activity remains a lack of suitable prime, long-income assets. There are a number of UK Institutions actively seeking opportunities in the regional markets, in search of higher yields outside Central London.
“Prime yields in Bristol have eased to 6.25%, although with fewer deals around this is based largely on sentiment.”
