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Colliers cautiously optimistic for 2013 Bristol office market7th February 2013

The financial and IT sectors kept the Bristol city centre commercial property market ticking over during 2012 – but the 22 per cent increase in activity was largely confined to the smaller end of the market.

Offices specialist James Preece from Colliers International said the lack of deals of more than 12,000 sq ft meant the average transaction size was just 3,500 sq ft. “2012 was another challenging year for the Bristol office market with take up at similar levels to 2011.”

Take-up in the City Centre totalled 409,225 sq ft for 2012 - a similar level to the past two years and within 8 per cent of the five year average.

 The largest letting in Q4 was to Digital TV Labs taking a lease on 7,765 sq ft at F&C’s Castlemead.

James Preece said: “The prevalence of sub 5,000 sq ft transactions continued in Q4 with around 90 per cent of the deals in this size range.”

The largest Grade A deal was Saffery Champness taking a lease of 6,805 sq ft at St Catherine’s Court, Clifton.

Higher tier Grade B rents remain at circa £18-£20 psf with the majority of lower tier Grade B at or around £10 per sq ft. “Incentives remain the key negotiating point with many deals attracting two-three months per year of the term certain.”

Out-of-town takeup totalled 251,373 sq ft - 15 per cent down on the five year average. Q4 takeup was at a similar level to Q2 and Q3 at 53,736 sq ft, but approximately 25 per cent below the five year average for the final quarter.

“The out-of-town market was also dominated by small transactions of less than 3,500 sq ft, the exceptions being the letting of the first floor Nicolson House (7,657 sq ft) to Harmoni HS, at £15.25 psf.

“There has been a marked lack of Grade A transactions out-of-town with no single transaction over 10,000 sq ft.”

Quoting rents have remained static with Grade A at circa £19-£22 psf and Grade B predominantly at £12- £15 per sq ft.

James Preece said: “2012 may be seen as the watershed year for the Bristol Office market with a significant upturn in transaction activity. The market was held back by the absence of any sizeable transactions in and out of town with only two occupational deals over 20,000 sq ft.

“But we remain cautiously optimistic that 2013 should see an improvement in these figures with a number of larger deals due to sign in the first half of the year.”

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