Bristol office market shaping up well so far in 201322nd April 2013

Unexpectedly high take up in the city centre has given the Bristol office market a much needed shot in the arm.

Colliers International offices specialist James Preece said overall Q1 take up (in and out of town) totalled 227,205 sq ft – 16 per cent up on this time last year.

“The office sector in 2013 has kicked off in far better shape than 2012. We speculated that 2012 might be seen as the watershed year for the Bristol office market and with Q1 take up significantly higher than many had expected it appears our forecasts were correct.

James Preece said although QI figures had been encouraging the market wasn’t out of the woods yet.

“Before we get too carried away we do need to factor in the purchase of 100 Temple Street by Bristol City Council, which accounted for almost 50 per cent of city centre take up in this quarter.

“However, with several larger enquiries still out there and at least two developers talking of starting speculative schemes that may indeed be light we see at the end of the tunnel.”

City centre take up totalled 145,555 sq ft - up a massive 59 per cent from Q1 2012 and 15 per cent up on the five year average.

The largest leasehold transaction was JISC taking a new lease of two floors at One Castlepark (9,302 sq ft).

“Following the trend of 2012 there was a complete lack of Grade A transactions in Q1 2013 with activity concentrated in the smaller sub 5,000 sq ft refurbished category.”

The technology media and telecoms sector remains very active and has dominated take up in Q1. Rents remain fairly stable but with very competitive incentives still on offer.

The picture wasn’t as rosy out of town where take up of 81,650 sq ft was down around 20 per cent on Q1 2012 and the five year average.

Biggest deals saw Nvidia take a new lease of 30,450 sq ft at 930 Aztec West. Otherwise there were just 13 transactions during Q1 across the sizeranges, with new and refurbished buildings being most successful.

Grade A rents remain at £20-£22 per sq ft with deals on some of the slightly older stock in this category agreeing rents in the high teens. Top tier Grade B property sits between £15-£18 per sq ft and lower tier Grade B between £10-£15. Incentives are
currently on average between 2-3 ½ months per year of the term certain.