Market snapshot

Office Market Pulse Bristol Q2 2017

Office take-up for the Greater Bristol market was subdued during the second quarter of 2017.  However, this was to be expected due to economic uncertainty surrounding the BREXIT negotiations and general election.

Notably, there were few sizeable deals in Q2.  The average deal size was below the 5 year average and the largest transaction was Jordan's acquisition of 13,480 sq ft at Orchard Street's Temple Back in the city centre.

Take-up at the smaller end of the size bracket was buoyant, with a total of 21 deals in the sub 10,000 sq ft category.

Supply remains an issue in Greater Bristol.  One scheme in the pipeline is Resolution Property's extensive refurbishment of The Pithay building, which will provide 110,000sq ft of Grade A space to the technology, media and telecommunications sector, with phase one due to complete later this year and phase two in 2018.

In this issue:

Enquiry levels holding up well

  • There were 57 new office enquiries in Q2 2017 – of which 30 were for suites of more than 5,000sq ft
  • The number of requirements for suites of 5,000 – 20,000sq ft has remained robust but the main issue is a lack of new space to the market.

Several large firms have been out viewing available space but with an ever shrinking supply, they face a dwindling number of options. Many enquiries have been in the market for some time now and decisions should be made before availability reduces further. There are several suites known to be under offer in the greater Bristol market and we expect these to cross the line in the next quarter.

Take-up dips slightly below average

  • Total take-up of offices (over 1,000 sq ft) in Q2 2017 was 200,669sq ft, compared with the 5 year average of 230,988sq ft.
  • Both markets are behind the figures that were seen for the same period in 2016

Total take-up across both the city centre and out of town markets was 200,669sq ft in the second quarter.  In Bristol’s city centre, take-up was 141,670 sq ft, which is a 12% rise on Q1. The out of town market was quieter, with transactions totalling 58,999sq ft, compared with 89,774sq ft in the first quarter of the year. 

A lack of larger deals in Q2

The letting of 13,671sq ft of first floor space to Jordan’s at Orchard Street’s Templeback was the largest letting this quarter. This was followed in size by the University of Bristol’s expansion into 10,047sq ft at 1 – 5 Whiteladies Road.  

In the 5,000sq ft to 10,000sq ft bracket, there were 14 deals done which indicates the robust market demand for this size of suite.

It is the lack of larger deals of 10,000sq ft plus that is slowing city centre take-up but we have seen an increase in enquiries for space of this size and several tenants are now carrying out viewings as they look to make decisions before the end of 2017.  

The out of town market has also seen a lack of larger deals at more than 10,000sq ft.  Just two deals in this category were done with other transactions all involving less than 5,000sq ft.

This is unusual as we would normally expect a higher level of activity in the 5,000 to 10,000sq ft bracket.     Overall, demand for office space in the Greater Bristol market has remained steady following the UK’s decision to leave the EU, with few occupiers deciding to change their requirements.

Supply continues its long-term fall

Works at Resolution Property’s The Pithay are now well underway with phase one due to complete later this year and phase two in 2018. The building will provide 110,000sq ft of space to the TMT sector which remains popular in the city centre with many new start-ups choosing to locate in Bristol.

Other buildings such as Castleforge’s One Cathedral Square are being fully refurbished to provide grade A space this summer, but with very few other developments in the pipeline, there is a strong case for development. 

The construction of 95,000sq ft of Grade A office space at Cubex’s Aurora, a part of the wider Finzel’s Reach scheme, remains the only speculative development in Greater Bristol, and it is understood that there are already floors within the building under offer.



Key occupational transactions Q2 2017


Building

Size (sq ft) 

Tenant/purchaser

Rent/Price   Lease  Landlord
Temple Back 13,480   Jordans £28.00 10 year lease with 5 year break  Orchard Street
3 Rivergate



9,190




West of England Combined Authority



 £22.00  5 years Credit Suisse
Spectrum



8,869



NHS SBS



 Confidential  10 years Affinity Global Real Estate
 Equinox 17,056   Biz Space  £1,550,000  Freehold Unknown

Source: Lambert Smith Hampton

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Peter Musgrove

0117 914 2013

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Peter Musgrove
Director - Head of Office - Bristol

0117 914 2013

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