Solid start to 2021 for Bristol office market

Photo shows: The Distillery, Bristol
The Distillery Bristol

The Bristol office market saw a solid start to 2021 despite challenging conditions caused by the pandemic.

Data for the first quarter of the year in the ‘Bristol Offices Quarter 1 2021’ report from commercial property specialist Colliers shows city centre Grade A headline rents remained unchanged at £37.50. Although, take-up in the city centre (116,457 sq ft) and out of town markets (61,523 sq ft) were below the five-year-average for this period, the levels achieved were far above the lockdown months of 2020.

The report also highlighted robust Q1 2021 investment volumes for Bristol offices that reached £85 million, matching the highest quarterly total in the past 12 months with deal numbers for the period marginally above the five year quarterly average.

James Preece, National Offices director at Colliers, said: “Despite continuing challenging circumstances created by the lockdown at the beginning of the year, the Bristol city centre office market has remained very resilient.

“Vacancy is marginally up to 6.6 per cent from 6.5 per cent in Q4 2020.

“Grade A supply remains exceptionally constrained, although 92,000 sq ft will complete at The Distillery and 43,000 sq ft of refurbished space will be delivered at 360 Bristol by mid-year. That said, active requirements from larger occupiers such as the BBC and Arup suggest that occupier appetite continues to improve.”

Both city centre and out of town markets saw a diverse range of sectors taking space, with tech and media the most active for growth and leasing in the city centre during the first three months of the year.

The largest Bristol city centre office deal in the first quarter of this year, according to the report, was the Department for Work and Pensions, letting 21,888 sq ft at 101 Victoria Street.

800 Aztec WestIn the out of town market, over half of Q1 2021 take-up was accounted for by NBB Generation signing for 32,007 sq ft at 800 Aztec West.

James Preece added that out of town market vacancy had stabilised, aided by improved take-up in the first quarter of 2021, and prime rents remained at £22.50 to £23.50 per sq ft.

However, he cautioned: “While transaction numbers appeared close to the average, there were only eight deals which implies slightly subdued levels of activity.In both city centre and out of town office markets in Bristol, a diverse range of sectors took space in Q1.”

Richard Coombs, National Capital Markets director at Colliers, noted that investments in Bristol offices in Q1 2021 had all been off market.

“Long term secure income is proving attractive for purchasers,” he said.

“Q1 2021 investment volumes reached £85 million, matching the highest quarterly total in the past 12 months, and deal numbers in Q1 2021 were marginallyabove the five year quarterly average.

“However, numbers were skewed due to the acquisition of Temple Quay House in Bristol city centre by Aberdeen Standard, in a £75 million deal on which Colliers advised the purchaser