An excellent year for the Bristol city centre office market should mean good news ahead for businesses occupiers as well as the industry, according to Chris Grazier, partner in charge of offices at commercial property consultancy Hartnell Taylor Cook.
Figures released by the Bristol Office Agents Society show that 28 deals were completed in the final quarter of 2019, with the 332,438 sq ft changing hands in those three months taking 2019’s total take-up to 693,909 sq ft, well ahead of both the five-year and ten-year average for the city centre.
The largest transaction of the year was communications giant BT’s pre-let acquisition of 200,700 sq ft at AXA/Bell Hammer’s Assembly, now the largest single deal on record for the city centre market since Lloyds at Harbourside in the 1990’s.
Grazier said: “The BT deal meant that Bristol ended the year with excellent take-up. When such deals are done, there’s a tendency for people to say ‘this is a one-off, so it skews the statistics’ – however, it both underlines Bristol’s position within the regional market in bringing in those national requirements, as the momentum it helps create shows underpin the next speculative starts and subsequent large deals.
“The take-up figures make for good reading, at a time when things have slowed in the wider economy over the last six months. A Lot of people have put business decisions such as relocations on hold in that time, meaning 2020 could be a good year if there is action with those requirements. There has been strong tech sector growth over the last few years, and Bristol is in prime position for national requirements.”
Other deals of more than 10,000 sq ft included Instant Group signing for 33,000 sq ft at Temple Point, Bishop Fleming acquiring the fifth floor of Templeback and Runway East expanding at 101 Victoria Street.
Grazier’s view is that after several years when the local market has been suffering from under-supply, with low levels of both new build developments and refurbishments, developers have been given confidence not just by the lettings activity, but by the new headline rents for the city being achieved, with £37.50 per sq ft and £38 per sq ft being recorded at 22-24 Queen Square and The Landing respectively.
He said: “There’s been a definite increase in people talking seriously about starting speculative new-build development. On top of that there are three or four really significant refurbishment projects of between 40,000 sq ft and 70,000 sq ft – so from a situation of undersupply, where Bristol only had 3% vacancy rate, things should return within 18 months or so to a more balanced situation.
“For occupiers, this is good news because there is more choice at all levels, as companies moving to new space creates churn and opens up space in secondary markets. It means there’s more fluidity in the market, which is good news for everybody involved.”