Bristol city centre saw its strongest office activity of the year in the final quarter of 2021, bringing the total to 540,910 sq ft, according to a new report published by commercial real estate adviser Avison Young.
The quarterly take-up of 249,944 sq ft was ahead of the five-year average for the period, according to the Big Nine office report, which looks at the commercial property market in Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, Manchester and Newcastle.
In Bristol, there were four deals agreed in the city centre greater than 20,000 sq ft, the largest of which was 74,373 sq ft to the University of Bristol at Trinity Quay and included Arup taking a pre-let on 27,377 sq ft at CEG’s speculative development, EQ, which is due for completion in Q1 2023.
The education and training sector has underpinned the market in the city. Alongside University of Bristol taking space at Trinity Quay, the highly regarded music institute BIMM has concluded a 15-year lease on 32,000 sq ft of space at St James’ House, Stokes Croft. Avison Young advised on both of these transactions, which made up two of the top three deals of the year by square footage.
As occupiers are looking for quality space to attract staff and meet ESG requirements, expectations are that prime rents will soon breach £40 psf.
“Encouragingly the upward movement in availability has paused in Bristol,” said Paul Williams, director at Avison Young in Bristol.
“Availability stands at 778,000 sq ft, down slightly on Q3 and compares to the 10-year average of 1.1 million sq ft.
“Where space is coming back to market, there is an opportunity for landlords to improve accommodation through refurbishment, particularly to satisfy occupiers’ ESG agendas and meet their own decarbonisation targets.”
With the current demand for Grade A space, there is continued development appetite with several schemes onsite, including CEG’s 184,000 sq ft EQ, the 207,000 sq ft Wellcome building and the next phase of Assembly, Assembly B&C (120,000 sq ft). Also, 1 Portwall Square, Halo at Finzels Reach and the refurbishment of Tower House are all scheduled to complete this year.
Nationally, office demand across the Big Nine returned to ‘normal’ levels of activity during the second half of 2021, as occupiers able to take a long-term view on their occupational strategies, did so.
The focus during the latter part of the year was very much on prime and new build accommodation. A strong finish to the year brought total take-up across the Big 9 cities for 2021 to 8.1 million sq ft, five per cent down on the ten-year average, but 42 per cent up on 2020.
National Q4 take-up was the highest quarterly total for more than three years.
The full report can be found at https://www.avisonyoung.co.uk/2022-forecast/focus/bristol