In its review of the regional office occupier markets, The Big Nine, commercial property adviser Bilfinger GVA reports that despite a quiet summer and the uncertainty created in the run-up to the referendum and its immediate aftermath, Bristol appears to have weathered the storm relatively well.
The quarterly report highlights that Bristol city centre office take-up reached 515,699 sq ft in the first three quarters of the year, already surpassing the total take-up of last year. By the end of the year it is expected to comfortably exceed the five-year average of 533,000 sq ft.
Overall sentiment remains very positive in the city centre with a number of new refurbishments coming towards completion in the form of 1 Brunswick Square, Freshford House, 21 Prince Street, Augustine’s Courtyard and 31 Great George Street. These high quality refurbishments demonstrate confidence in the market and will continue to provide high spec space to occupiers, capitalising on the continued low levels of grade A and good grade B stock in the city.
In addition, Bristol has seen the first speculative office development of 2016 with Cubex Land’s development of Aurora at Finzel’s Reach, which will provide 95,000 sq ft of grade A space and is targeted to complete in Quarter 4 2017.
Richard Kidd, Director of Office Agency at Bilfinger GVA in Bristol says, “Key requirements currently in the market include HMRC with 115,000 sq ft, likely to be housed in the pre-let deal at 3 Glass Wharf and Arup’s requirement for 40,000 sq ft, which if agreed at Redcliff Wharf could set a new headline rent for the city. Ovo Energy completed the largest deal this quarter of 23,000 sq ft at Templeback.”
Throughout the nine cities reviewed in the Big Nine report, Bilfinger GVA reveals that total take-up in Q3 was 1.06m sq ft, the lowest quarterly total since 2012 and 16% down on the five-year quarterly average. Out-of-town there was a better performance, 5% above average. However, with a recovery in sentiment since the summer there are a number of significant deals across the country under offer which should bring an improvement to the figures during the final quarter.
In Bristol out-of-town take-up was 61,656 sq ft, compared to a five-year quarterly average of 71,833 sq ft.
In conclusion, Richard Kidd says, “Demand for regional offices, having returned to pre-recessionary levels over the past three years, will continue, albeit with a short term drop in activity as the market comes to terms with the medium term implications of Brexit.”
