There are very real signs of improvement in the property market in Bristol, according to CBRE Bristol’s latest quarterly report. According to the firm’s latest figures, the Bristol market enjoyed a strong start to the year with a marked increase in demand in the first six months of 2014.
A total of 295,350 sq ft of property was let in the first two quarters of the year, a reflection of the confidence in the marketplace. Demand was much higher than in previous years and the amount of property let was also significantly higher than in 2013.
Philip Morton, Head of Agency & Development at CBRE Bristol, commented: “There are really encouraging signs in the marketplace and it appears Bristol is starting to emerge from the downturn with a lot of positive sentiment. Several large deals are on the verge of going through, which will only add to the momentum; we have not seen such high levels of interest for several years and all the signs are very positive.”
However, the downside of the increased demand is a fall in the amount of office space to rent. The situation has been made worse by changes in legislation, which has allowed developers and investors to convert office space into residential accommodation.
The changes have seen one million sq ft of office space being taken out of the Bristol market, meaning there is currently 1.5 million sq ft of available office space in the city – a fall of 11 per cent over the last six months.
However, there are new developments about to come onto the market with the development at 2 Glass Wharf at Temple Quay and the refurbishment of 66 Queen Square. The two developments will add a total of 159,000 sq ft of available Grade A office space.
Developers are continuing to look for value for money, which means there has been limited demand for Grade A office space. As a result of the low demand, prime rents have remained static at £27.50 per sq ft. Meanwhile, rents in the second hand market have improved markedly, going up by as much as 10 per cent in some parts in Bristol.
