Businesses in Bristol are seeing the UK’s biggest increase in costs when it comes to occupying a new office building, according to new research from commercial property agents Lambert Smith Hampton (LSH).
LSH’s latest Total Office Cost Survey (TOCS) 2018 reveals that Bristol saw nearly a ten per cent jump in costs for new office space over the twelve months to April 2018, compared with an average increase of just 2.6% across the rest of the UK.
New buildings in central Bristol have a total cost per square foot of £76.46 – a rise of 9.8% – while older properties have a total cost of £63.97 per square foot, the report found.
The main reason for the overall cost increase was Bristol’s rising rent levels, the report said. The arrival of much needed new build development to the market this year, including Aurora at Finzel’s Reach, had triggered a spike in rental values with fierce competition amongst occupiers keen to secure space, due to an ongoing lack of good quality office supply in the city.
However, the data highlighted that Bristol still represents huge value when compared with business space costs in London. While the annual cost for a new office in Mayfair stands at £18,303 per workstation, this shrinks to just £7,646 in Bristol’s city centre.
“Bristol’s highly educated local workforce, strong academic links and good transport networks make it a highly attractive option for businesses looking to establish themselves in the south west,” commented LSH Director and Head of Bristol Office Advisory Peter Musgrove.
“We are certainly seeing healthy levels of demand across all sectors, particularly in technology, media and telecoms (TMT), but this demand only highlights the supply shortages in the city, particularly of new build Grade A space, and against this backdrop, further rental growth looks likely,” he added.
To calculate the total cost figure in the report, a range of factors were taken into account, including rents, rates, fit-out and furniture costs, insurance, security, cleaning, waste disposal, energy bills and management fees. In total, 54 different locations were surveyed.
