The 81,200 sq ft letting at Bridgewater House to EDF Energy in Bristol city centre helped push the city’s quarterly office take-up well over its five-year, quarterly average, according to Bilfinger GVA’s latest Big Nine Report.
The deal contributed to a 45% lift in city centre take-up in the first quarter of the year, supporting the strongest start to the year since the economic downturn for regional office take-up across the UK.
In Bristol, take-up reached 195,502 sq ft in the first quarter, compared to a quarterly five-year average of 135,140 sq ft. Headline rents are also rising, currently standing at £28.50, above the national average for the Big Nine of £27.78.
“Take-up figures are up significantly, and Bristol can expect a strong run into quarter two,” says Richard Kidd, Director and Head of Offices at property adviser Bilfinger GVA in Bristol.
Two deals on recently refurbished space, 27,000 sq ft to Fraser Nash Consultancy at Narrow Quay House, and 15,500 sq ft to JLL at Great George Street have achieved rents close to prime new build Grade A.
Overall in the UK city centre and out-of-town take-up amounted to 2.3 million sq ft, 13% above the five-year quarterly average. City centre total take-up comprised 1.47m sq ft, 17% above the five-year quarterly average. Out-of-town total take-up amounted to 0.86m sq ft, 7% above the five-year quarterly average.
Net effective headline rents increased by an average of 7.5% across the Big Nine over the year to Q1 of this year, as rent free periods fell to 20.7 months on a ten year term. Nevertheless the rate of growth has slowed from the double digit annual growth experienced last year.
Out-of-town, Bristol and the South West has also been performing well at 63%, against the five-year, six monthly average.
Richard Kidd continues, “A number of refurbishments are underway out-of-town as 15 and 25 year lease events bring space back to the market. This is a trend we anticipate continuing as a consequence of the lower capital commitment required compared to new build and the levels of flexibility expected by occupiers.”
