Bristol Office Agents Society has announced a strong start to the year for Greater Bristol’s office markets with take-up for the first six month’s totaling a healthy 438,817 sq ft. Demand was subdued in the first quarter of the year, but strong levels of take-up returned for the second quarter of the year.
The largest city centre deal in H1 was Immediate Media’s acquisition of 34,612 sq ft at Trilium’s Eagle House. The building is to be comprehensively refurbished to provide high quality space, with the potential for a further 3,600 sq ft penthouse suite to be added with a new fifth floor.
Take-up levels were also boosted with the letting of 30,148 sq ft within One Victoria Street to Runway East. The acquisition represents the co-working providers’ first venture outside of London. The opening of this centre will help to meet the strong demand from start-ups looking for quality space that has been felt for several months now. Bristol in particular has seen an increase in demand from these firms due to its popularity with TMT occupiers and firms looking for creative space to work from.
Grade A take-up within Bristol has been quiet for the first half of the year. However, this is due to a lack of supply, not a shortage of demand. Just 25,000 sq ft has been taken up during the first six months of the year, but with supply levels at an all-time low, and little new development underway this is only to be expected. Resolution’s launch of approximately 50,000 sq ft refurbished space at Programme, and Legal & General’s launch of another 50,000 sq ft of refurbished space at Temple Point will help to meet demand in the short term, but with any new developments likely to take as much as two years to complete there are concerns that Bristol may lose occupiers to other cities able to provide the calibre of space they require, in the required timeframes.
Bristol’s out of town office market has also performed well in the first half of the year with take-up reaching 170,833 sq ft from 25 deals. This was boosted, in particular, by ALD’s expansion into 27,259 sq ft at Harlequin Office Park. Levels of supply in Bristol’s out of town market are under increasing pressure. With no new development underway or anticipated in the short term, landlords able to offer refurbished space stand to benefit as rental growth becomes further evident.
Knight Frank’s partner in Office Agency and chairman of the South West OAS, Martin Booth said: “The shortfall in office supply will not be rectified any time soon. The popularity of Bristol to inward investors – and the increase in employment opportunities generated – is great to see, but this added demand only highlights the supply shortages the city will have going forward.”
Peter Musgrove, a director in office agency and head of office at Lambert Smith Hampton in Bristol, commented: “Take-up so far for the year is a reflection of supply issues rather than demand. We continue to have good levels of requirement across all sectors, especially TMT, but availability, especially of Grade A space, is lagging. Due to this we expect to see more deals akin to Immediate Media’s and a return to pre-lets.”
