Market snapshot

Office Market Pulse Bristol Q3 2014

Market confidence has made a dramatic return to the Bristol office sector with the city centre on course for the highest annual take-up since 2008.

You can download a PDF version of this Bristol Office Market Pulse, or to read and sign-up to receive Office Market Pulses from other UK centres, click here.

In this issue:

City centre stock set to diminish as developers purchases continue to influence

These encouraging stats and a return to confidence in the city centre has been greatly influenced by the continued increase in developers purchases (generally PDR).

With city centre stock diminishing at record rates, and no new developments on the horizon for completion beyond next year we could see a major under-supply in both grade A and B space within the next 18 months.

For a detailed breakdown of Q3 2014 availability by grade, please click here or on Chart 1 to the left of this article.

Market confidence makes a strong return

Q3 2014 has seen city centre take-up of 140,278 sq ft, spread over 29 deals with the largest to Ovo Energy at The Core. Although this figure is a slightly down on Q2 it is still encouraging and one of the best quarters for take-up in recent years.

To date take-up stands at 435, 623 sq ft, currently the second highest total in six years.  With a number of deals still in solicitors’ hands due for completion in Q4, this year is could see the highest take-up since 2008.

Out-of-town, take-up in Q3 is high at 338,000 sq ft but this is predominantly due to the 63,000 sq ft deal to TSB at Keypoint. Q4 is not looking as good; we predict the year-end figure to be just below the 400,000 sq ft mark, but, bar 2010, this is still the highest we have seen since 2007.

Deal numbers have significantly increased this quarter, bringing current annual totals to 100 in the city centre and 55 out-of-town.  If this trend continues, year-end figures will be approaching 2005/2006 figures with the city centre nearing record numbers – currently 139.  An increase in numbers of city centre deals has coincided with a drop in the average deal size to 4,500 sq ft; a good indication of an active market.

Out-of-town sees a different story where an increase in average deal size highlights the continued oversupply of smaller space.

For a detailed breakdown of Q3 2014 take-up by grade, please click here or on Chart 2 to the left of this article.

Key Bristol office lettings, Q3 2014

Property Size (sq ft) Landlord (s) Tenant / Purchaser
Tower Wharf, City Centre 13,545 Rockspring New Law Legal
Kings Orchard, City Centre 15,200 Bevan Brittan Parsons Brinckerhoff
Beacon House, Clifton 39,500 Private

Bristol University


Key Point, Out of town 63,858 CBRE Investors TSB


Prime rents have consolidated and are predicated to rise in 2015

City centre rents will remain stable this year, but will rise with the appearance of new stock to the market in 2015.

Out-of-town, a lack of Grade A stock will put pressure on prime rents. It remains difficult to see where the new stock will come from in order to see that pressure realised.

For a detailed breakdown of Q3 2014 prime rents, please click here or on Chart 3 to the left of this article 

Limited investment office deals in Q3 set to double next quarter

Q3 saw limited activity in the sector in terms of deals done. Whilst over £0.97bn was invested in property in the region last quarter, only £24.7m was invested in city centre and out-of-town offices. F&C REIT paid £7.23m at 6.93% for 620 and 230 Bristol Business Park, whilst ZC Ronogil paid £7.6m for a data centre at Sowton Estate in Exeter.

With a number of high profile office investments in the market at the moment, the last quarter should witness investment of at least £50m.

To view our latest UK Investment Transactions (UKIT) report, please click here.

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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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