A new era of Grade A office space is set to shake up the Bristol market, according to leading property consultancy JLL, as businesses seek out next-generation ‘white-collar factories’ to house their operations.
Demand for quirky ‘factory-style’ space – with ‘smart services’ and low running costs – is likely to come from creative businesses in expansion mode, while it could also be boosted by employers looking at near-shoring their operations to regional cities such as Bristol to escape rising costs in the Capital.
These predictions, revealed today (January 29) at JLL’s South West Market Review, themed ‘smart future’, come after “a real breakthrough” for Bristol’s office market in 2014, said Ian Wills, director, office agency, at JLL in the city. He said: “Bristol’s office market rose like a ‘phoenix from the ashes’ in 2014 and we expect demand to continue this year, with more speculative city centre development in the pipeline.
“There will be continued demand for conventional, Grade A space in Bristol, but we predict a shift in the marketplace as businesses seek out a different kind of space.”
Bristol needs to cater for rising demand for office space akin to White Collar Factory in London, a scheme being built in the city’s ‘silicon roundabout’ tech quarter with a focus on innovative and sustainable design.
Jeremy Richards, head of the Bristol office of JLL, said that a move towards ‘smart’ factory-style office space could represent the biggest shake-up of Bristol’s office market since the introduction of large floorplates, which came with the opening of Portwall Place in 2008, at the time billed as the city’s first ‘London-style super office’.
He added: “The impact of advancements in technology on the property market is likely to be significant as the requirements of a multitude of sectors including logistics, retail, healthcare and more shift as innovative, ‘smart’ ways of working and living are embraced.
“The challenge for the property market is to keep pace with the changing face of technology; the latter is currently moved faster than the built environment can adapt.”
The logistics sector, for example, has already been required to meet demand for more sites in regional locations with the growth of the online retail market and parcel distribution networks. “However, new technologies are emerging all the time with Amazon Prime Air, for example, set to become a reality in the US by the end of this year”, said Paul Baker, director, development consultancy, at JLL in Bristol.
“Amazon’s delivery drones can carry packages weighing up to 5Ib and these make up more than 85 per cent of their deliveries. If this technology becomes viable on a large scale, then property requirements in the logistics sector may well be affected, with a need for a large number of hyper-local, smaller local logistics sites likely to emerge.”
According to the Industrial Agents Society, total take-up in the South West’s industrial sector was 2.62 million sq ft in 2014, up 17 per cent year-on-year, with total transactions up 19 per cent to 254. The region saw a shortage of quality ‘Big Box’ stock of over 100,000 sq ft, with demand driven by the online retail market.
Office take-up across Greater Bristol was up 70 per cent in 2014 on the previous year at 1.27 million sq ft. Other than 2007, this is the best result in 25 years. Meanwhile, overall availability of office space is down 35 per cent on 2013.
Major deals included KPMG taking 52,000 sq ft at 66 Queen Square and PwC taking 28,000 sq ft at 2 Glass Wharf, Temple Quay.
