Demand for offices across the South West has increased significantly in the first half of 2014 according to Alder King’s mid-year Market Monitor Update, with regional take-up rising 38% to 1.08 million sq ft compared to 784,000 sq ft in the same period in 2013.
In Bristol, office take-up in the first half of the year rose 22% from 422,000 sq ft to 515,000 sq ft. With approximately half a million sq ft of identifiable demand in the city centre and out of town markets, the 735,000 sq ft total achieved in 2013 looks set to be exceeded by some margin. The highest city centre office rent has stood at £27.50 for four years but the prospects of an increase in the second half of the year look increasingly strong.
Half year take-up in the region’s industrial market stands at 1.8 million sq ft, an unnaturally depressed figure due to the negligible amount of good quality stock which is impacting on take-up. In Bristol, supply stands at just 800,000 sq ft, its lowest level for over 10 years. Speculative development is now underway across Gloucestershire as well as in Bristol, Exeter and Truro to help address the lack of supply.
Simon Price, head of agency at Alder King, said: “The office and industrial markets are gathering pace in all key centres of the South West, particularly Bristol, Exeter and in Swindon where the London Paddington to Cardiff railway electrification project is responsible for a significant number of office lettings in the town.
“Demand is now approaching pre-recession levels. Supply is constrained in many centres but speculative office and industrial development is now underway with a number of schemes due to complete in the next 12 months, including Skanska’s 66 Queen Square and Salmon Harvester’s 2 Glass Wharf in Bristol. The outlook for the second half of 2014 looks very exciting.”
