Commercial takeup in the first quarter of 2012 has performed better than expected according to analysts at Colliers International.
Overall take up (in and out of town) improved by 44 per cent quarter on quarter, due mainly to an increase in the amount of space transacted out of town in Q1.
City Centre take up of 117,000 sq ft was marginally up quarter on quarter, but down 26 per cent on the same time last year.
Offices specialist James Preece said Colliers International had witnessed increased interest in freehold deals as some businesses are opting to purchase rather than lease their properties, with close to 38,000 sq ft this quarter.
They had also noted a trend toward fewer but larger transactions especially in the out of town sector.
James Preece said: “The city centre has seen an above average level of freehold deals. Although it is too early to attribute this to a sea change in business trends it does underline the fact firms are actively looking around for the best value deals available – even if this means buying rather than letting premises.
“This has gone hand in hand with a distinct lack of Grade A transactions – with just one completing.”
This was Ernst & Young expanding in The Paragon taking an additional 8,000 sq ft.
The largest transaction was the sale of the Old Malt House, Pennywell Road (25,645 sq ft) to a private individual for owner occupation.
“We anticipate recent requirements seeking grade A offices will boost the number of transactions in the next few quarters. “
The number of deals in the 5,000 to 10,000 sq ft category had more than doubled the amount in the last quarter or the same quarter last year.
There is no real change in rental levels or incentives. Grade A remains at circa £27.50 psf, top tier grade B between £18.50 and £21 psf and lower grade B at around £10 psf.
James Preece said the out of town market had improved after a difficult 2011, but had witnessed a reduction in smaller deals.
He said: “The sector has been dominated by engineering and technology firms and had enjoyed its best quarter since early 2010 with 104,000 sq ft of take up. This is up 165 per cent quarter on quarter and 44 per cent up on the same time last year.”
The improvement was largely due to BNS Nuclear Services taking a lease of 40,760 sq ft at The Quadrant in Aztec West – the largest out of town deal in almost two years.
“Surprisingly the number of transactions below 3,000 sq ft has dropped 30 per cent compared to this time last year and 38 per cent quarter on quarter. There has been an improvement in the number of transactions in the 5,000 -10,000 sq ft size range.
Out of town rents and incentives remain the same with Grade A at £20 – £22 psf, top tier Grade B at £15 – £18 psf and lower Grade B at £10 – £14 psf.
