Increasing activity in the Bristol office sector in Q2 has helped compensate for slower than anticipated business levels at the start of the year, according to the latest Bristol Offices Snapshot from Colliers International.
The report reveals that although overall take-up in the first half of 2015 is almost a quarter down on the same period last year, quoting rents are rising and the company anticipates rents will cross the key £30.00 per sq ft barrier this year.
National offices specialist James Preece said the 30 per cent improvement in take-up on Q1 had been driven by increased letting activity in the city centre.
“Falling supply levels – especially in the city centre – are however triggering strong rental growth, most notably in the grade B market.”
James said the number of deals was up an impressive 31 per cent in Bristol city centre – but transactions remained concentrated in the smaller end of the market with over a third of all deals being between 5,000 and 10,000 sq ft.
“There were 38 transactions over 1,000 sq ft but no deals above the 12,764 sq ft of grade B space let to Desklodge at 1 Temple Way.
Q2 take-up is up 51 per cent on Q1 to just under 160,000 sq ft with half year take-up totalling 266,000 sq ft – down 10 per cent on 2014.
The largest Grade A letting was to ADP taking who took 8,362 sq ft at nearby Templeback.
Grade A rents remain largely at £28.50 per sq ft. whilst lower grade B rents have jumped to £13.00 to £17.00 and top grade B are quoting £18.50 to £24.00 per sqft.
Out-of-town take-up reverses the trend, marginally down on the first quarter but down almost 40 per cent to 133,000 sq ft looking at H1.
James Preece said: “The two largest lettings this quarter were Apak Group taking 22,500 sq ft at Nibley Court, Yate and Leidos taking 21,000 sq ft at 1 & 8 Monarch Court, Emersons Green.
Unlike the city centre, out-of-town take-up is skewed towards the larger transactions.
Quoting rents remain stable at £20.00 to £22.00 per sq ft for Grade A with Grade B rents between £14.00 and £17.00 per sq ft.
He concluded: “It is encouraging to see take-up improving in the city centre this quarter. We are continuing to see good demand both in and out-of-town. With limited supply, particularly in the city centre, quoting rents are still rising and we anticipate rents to cross the important £30.00 per sq ft barrier this year.”
