Bristol Office Demand

A recent report from Savills concluded that Bristol experienced a solid year for office market demand in 2017 with 611,000 sq ft of office space taken, 6% above the long term annual average. 57% of take up was signed for during the second half of 2017.

This was driven by Dyson taking 29,000 sq ft with University of Bristol’s letting 27,000 sq ft at 1 Cathedral Square.
The report identifies the recent Simmons & Simmons signing for 27,000 sq ft at Aurora, Finzels Reach as a key move. The 95,000 sq ft speculative Finzels Reach scheme is now 40% pre-let with competition for space intensifying among tenants for the remaining floors.

Bristol’s TMT (Technology, Media and Telecoms) sector took 134,000 sq ft of the office space taken last year, 22% of the city centre total. Savills highlight that 28 of the 30 deals were on floor sizes below 10,000 sq ft, indicating the depth of demand within the sector.

Take up in Bristol’s out of town market reached 425,000 sq ft, 34% above the 10 year average. This was largely driven by Babcock signing for 86,000 sq ft at 100 Bristol Business Park during the final quarter.

Office requirements remain robust in the Bristol market, and Savills expect take up to again reach circa 600,000 sq ft during 2018, 10% above the 10 year annual average.

Metropolis is tracking around 30 tenants with office requirements for Bristol, with a further 50 companies approaching decisions on whether to search.

Advertisements

Bristol Bounces Back

A recent report by Lambert Smith Hampton on the Bristol office market report, reveals that in the final quarter of 2016 transaction levels reaching almost double those of the previous quarter. Take-up reached 267,200 sq ft in Q4 2016, compared with 134,400 sq ft in Q3 2016. Strong demand has led to continued pressure on office supply in the city centre.

City centre take-up was boosted by HMRC’s pre-let of 107,000sq ft at Salmon Harvestor’s 3 Glass Wharf, which was the largest Bristol office deal of the year. Total take-up has exceeded the five year average. There were three deals for new office space in Q4 2016: Foot Anstey at 2 Glass Wharf, The West Wing Glass Wharf and JLL at 31 Great George Street.

The second-hand city centre office market has also seen increased levels of take-up with several deals of over 10,000 sq ft, including lettings at South Quay House, Redcliff Quay and the purchase of Victoria House for owner occupation. Companies recently signing for space in Bristol and reported by Metropolis included Regus, Unite and SmithCorp.

The out of town market saw annual take-up of 308,380 sq ft, including the letting of 100 Bristol Business Park to Babcock.. The other key letting of 30,430 sq ft was to Highway England at 930 Aztec West.

Construction of the 95,000 sq ft of Cubex’s Aurora office scheme at Finzels Reach is now well underway, with completion expected by the end of 2017. While the 53,000 sq ft refurbishment at Castleforge’s One Cathedral Square, is due to complete in May 2017.

Metropolis is tracking around 40 office requirements in Bristol and some 50 companies approaching lease events that could result in a relocation in 2017 or 2018.

 

Bristol market on the Rise

A recent report on the Bristol office office market from property consultant Colliers International revealed that office take-up in Bristol in the first half of 2016 reached 380,000 sq ft, which is a substantial 43% up on the first six months of 2015. Bristol is on track to reach take up of 800,000 sq ft by the end of 2016, well above the five year average of 533,000 sq ft.

The strong figures include two recent deals: EDF Energy taking 81,000 sq ft at Bridgewater House, Direct Line purchasing 63,000 sq ft at The Core and 28,000 sq ft in let at Narrow Quay House to Frazer Nash Consultancy. Grade A (new and recently refurbished space) take-up was 123,570 sq ft.  Vacancy levels remain at an all-time low – 7.3% (Bristol) and 7.0% (Grade A) respectively.

Colliers say that Business Services represented 28% of total take-up for the first six months of 2016, while Energy and Utilities were the second most active business sector at 21%, although that 21% comprises
the EDF Energy deal only. The demand for space remains strong, with a good level of significant sized requirements actively seeking high specification centre city offices. HMRC has the single largest requirement of more than 170,000 sq ft.

Metropolis is currently tracking around 40 companies with searches underway in the Bristol area. In addition, around 50 medium/large companies are approaching lease expiries in 2017/18.

Tech and digital companies are also key drivers behind office demand in Bristol, with the BBC, IMBD (owned by Amazon), Hewlett Packard, Just Eat and Huawei all recently choosing to locate in the city

66 Queen Square was the last Grade A office scheme to be completed and only 3,500 sq ft is available. The 95,000 sq ft Aurora scheme, is the only office building under construction and will be delivered in Q4 2017. The 250,000 sq ft ‘Assembly’ office scheme is currently looking for revised planning consent, while the 184,000 sq ft ‘Aspire’ scheme is tipped for a late 2016 start.

Bristol Offices Bounceback

Office take-up in Bristol reached nearly 300,000 sq ft in the first half of 2014, including 180,000 sq ft of deals in Q2. This compares to only 500,000 sq ft let in the whole of 2013 and local agents are tipping 2014’s total could reach 700,000 sq ft. Recent large deals have included PricewaterhouseCoopers at Glass Wharf, HSBC at Redcliff Quay, Tribal Group at Kings Orchard, National Friendly at Queen Square and Mapfre Abraxas at a undisclosed address in Bristol.

Ovo Energy is on the verge of signing for 70,000 sq ft and there are also a number of other circulating requirements including AXA, EDF, Alcatel, TSB and KPMG. Metropolis is monitoring around 25 companies in Bristol that have medium or large searches either active or potential.

There is around 170,000 sq ft of new grade A offices due for completion by early 2015, including 2 Glass Wharf (92,000 sq ft), 66 Queen Square (59,000 sq ft) and Narrow Quay House (26,000 sq ft). There are also plans to revive the 400,000 sq ft Glassfields office scheme in 2015. However, there are already a number of firms positioning themselves with requirements of 20,000 sq ft upwards positioning themselves to take the space due to be completed in the next 9 months.

Secondhand space has proved popular, especially as Grade A space has been in short supply and office availability overall has fallen to a five year low, causing average office rents to rise 10% to nearly £20 psf.

The outlook is for more Bristol deals as the number of requirements chase a dwindling supply of top grade offices, while a considerable number of lease expiries are expected over 2015-16.