The Bristol Office Agents Society take-up figure for Bristol’s city centre in Q3 2017 was 173,022 sq ft, which represents a 28% increase on the same period last year and the strongest quarterly take-up this year.
Several requirements that have been in the market for a long time have now landed and with sustained high demand for a variety of space, we expect robust take-up to continue into the final quarter of the year.
The largest city centre deal in Q3 was the letting of 16,871sq ft of first floor space to Grant Thornton at Salmon Harvester’s 2 Glass Wharf, which is now fully let, with PWC having taken 8,965sq ft of 4th floor space.
Perhaps the most anticipated deal was Mewburn Ellis’ pre-let of 13,326sq ft of first floor space at Cubex’s Aurora, which has broken record rent levels in Bristol with rents rising above the £30.00psf mark. Aurora is the city’s only speculative office development and with other floors believed to be under offer, it looks set to be well let ahead of its completion in Q2 2018.
Grade A take-up has remained strong this quarter with 45,000sq ft of space being taken out of the city centre market. With further deals due for completion by the end of the year, and only one speculative development underway, there is very limited grade A supply to the market.
Bristol’s out of town office market has performed particularly well in Q3 with take-up over double that of the last quarter, with activity from 23 deals totaling 134,456sq ft. This was boosted, in particular, by the letting of newly refurbished space at St Monica Trust’s The Chocolate Factory in Keynsham, where an unnamed occupier has taken 29,783sq ft on the 4th and 5th floors. Pukka Herbs has also taken 17,222sq ft of 3rd floor space in the building.
Overall, the Bristol office market has fared well during times of economic uncertainty and this quarter’s take-up statistics support this. Take-up in the city centre and out of town markets combined in Q3 was 307,478sq ft, which is a 55% increase on the same period last year, and a 33% increase on the five year average for this period. Enquiry levels remain high and with several more deals due to complete by the end of the year, we expect 2017 to finish with take-up well in excess of the five year average.
Andy Heath of Cushman and Wakefield commented: “The acute shortage of supply is leading to strong rental growth which we predict will take prime rents to early-mid £30’s psf by the middle of 2018. The strong demographic, improving infrastructure and quality of place makes Bristol one of the first choices for any company looking to near shore’.
GVA’s Richard Kidd added: “It has been a strong quarter of office take up in both the city centre and out of town markets showing the continued strength of demand. We have seen a long anticipated increase in City Centre headline rents achieved at the new Aurora building at Finzels Reach and believe that headline rents may well increase further in the coming months. The challenge that we face in the City is a shortage of future space and this may well have an impact on occupiers looking to locate or expand within the City.”
