The first quarter of 2016 saw take up of offices in Bristol hit 270,500 sq ft – 56 per cent up on the same period last year.
Colliers International National Offices director James Preece said one highlight of the exceptionally bright start to the year was city centre take up of 195,500 sq ft – the highest first quarter figure since before the downturn.
He said: “Cynics will point to EDF’s long awaited completion on 81,000 sq ft at Finzels Reach as skewing the figures – but the underlying sentiment is defiantly positive and we expect to see both grade A and B rents continuing to increase throughout the rest of this year.”
Fellow National Offices director Catherine Collis stated: “Office to residential conversions continue to remove stock from the market but this trend is generally moving out to peripheral locations and Clifton.
“Demand has remained diverse with some large requirements currently seeking space from the public sector, professional and financial services and the growing TMT sector.”
She added that Grade A rents remain at £28.50 per sq ft – just short of the key £30 per sq ft mark – while out of town take up was up 12 per cent on last year at 75,000 sq ft in Q1.
“There is real upward pressure due to lack of good supply. Significantly, the margin between top grade B and grade A rents has narrowed with £25 per sq ft now having been achieved.
“Out of town demand has improved and there has been a noticeable improvement in requirements in excess of 10,000sq ft.
“Once again the engineering, professional services and technology sectors have dominated take up this quarter.”
James Preece commented: “We are beginning to see a disparity between grade B rents in the city centre and out of town, with the latter looking comparatively low and perhaps representing an opportunity for owners and investors.
“Incentives have continued to be eroded as occupiers compete for the low levels of good quality office stock. Based on the current market conditions, we expect to see both grade A and B rents continuing to increase throughout the rest of this year.”
