The Bristol office market had its strongest quarter in five years in Q4 2019, bringing take-up for the year comfortably above the ten-year annual average at 938,000 sq ft, according to Avison Young’s latest Big Nine report.
The city centre market, with 12 of the biggest deals in Bristol, more than made up for the sluggish activity out-of-town.
Spearheading Bristol’s performance was BT, who took 200,742 sq ft in an 11 storey pre-let on the Assembly scheme, the construction of which will complete this year. This is the first of 13 planned BT hub relocation transactions in the UK, providing a boost to the Big Nine markets, and in Bristol marked the deal of the decade.
The flexible workspace sector, along with TMT and creative services, have been the standout performers of the year. Serviced offices firm Instant Group acquired the last three floors at Temple Point (32,872 sq ft) on behalf of BT, the next biggest deal of Q4.
Paul Williams, director at Avison Young in Bristol comments, “As the serviced and co-working sector grows, we’ve been seeing a blurring of the lines between traditional offices and Category A+ fitted out space, as landlords increasingly offer fully fitted or turn key solutions driven by tenant demand.”
Headline rents remain at £35psf although £37.50 was achieved on a single letting of 3,800 sq ft at 22-24 Queen Square, setting a new record rent for the Bristol market.
Paul continues, “With take-up above the ten-year average, this marks a good performance for 2019, however the market continues to be constrained by lack of supply, similar to other regional markets, with the development line still constricted. Against this backdrop we are expecting to see upward movement on Grade A rents during 2020.”
Development activity includes the speculative 93,000 sq ft Distillery at Glassfields, which is currently under construction. In addition, there is the 110,000 sq ft Halo at Finzels Reach, being built by developers Cubex and the 34,000 sq ft 1 Portwall Square by Nord Development, both of which are also on site.
Total take-up across the Big Nine office markets (Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, Manchester and Newcastle) amounted to 8.8 million sq ft in 2019, 3% above the ten year average and comparable to 2016, a year that was similarly dominated by political uncertainty.
There is currently 5.8 million sq ft of space under construction across the Big Nine, 56% of which is already pre-let, underlining the ongoing appetite of occupiers in regional markets.
