The Bristol office market has continued to see considerable demand and a tightening of supply in the first half of the year leaving less than 150,000 sq ft (13,935 sq m) of Grade A space available in the city. According to Savills this will only be sufficient to respond to around 12 months worth of demand at current levels.
The shortage of supply is anticipated to cause further rental growth in the market with rents currently standing at £28.50 per sq ft (£306.7 per sq m) and only marginally less for Grade B stock, according to Savills.
The firm notes that take up in the first half of the year reached 270,000 sq ft (25,083 sq m) broadly in line with the long term average. The increased demand has been predominantly from TMT and public services occupiers accounting for 78,000 sq ft (7,246 sq m) and 76,000 sq ft (7,060 sq m) respectively. The University of Bristol has been one of the biggest occupiers taking space in the year to date, taking 42,000 sq ft of space over two deals. Linked to this the city has seen an increase in the number of collaborative working providers enquiring for space in the city during the first half of the year as landlords develop a greater understanding of this type of tenant.
Savills highlights there is currently only one speculative development on site in the city centre, which is Aurora and is set for practical competition in Q2 2018. The lack of speculative development is increasing pressure on the existing stock in the market, with refurbished office space becoming more popular as occupiers adjust to the higher rent environment.
Christopher Meredith, director in the business space team at Savills Bristol, comments: “The Bristol office market has had a strong start to the year, the story remains largely unchanged from 2016; good levels of demand are met with a lack of supply. We believe it is only a matter of time until the next speculative development is announced in order to relieve the pressure on the city centre.”
