Market snapshot

Office Market Pulse Bristol Q4 2013

Large deals in the Bristol market drive the average deal size to over 5,000 sq ft whilst a return to developers' purchases has had the biggest impact on city cntre supply with the governments permited development rights allowing 316,821 sq ft of office stock to be brought for alternative use in 2013 taking a third of available office stock off the market.

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:

Developers' purchases impact office supply, taking a third of available stock off the market

A return to developers’ purchases has had the biggest impact on city centre supply with the governments permitted development rights allowing 316,821 sq ft of office stock to be brought for alternative use in 2013 taking a third of available office stock off the market. This has especially affected Grade B & C stock, which has seen a fall from 950,688 in Q4 2012 to 692,380 in the same quarter this year.

There are three new build schemes currently on-site, Cubex’s 48,000 sq ft at One Victoria Street, due to complete in early 2014 as a Grade A refurbishment; Salmon Harvesters, 98,523 sq ft at 2 Glass Wharf and Skanska’s 58,365 sq ft at 66 Queen Square.

There are still no new developments in the out of town market but movement is being seen along the M5 rather than the traditional prime locations of North Bristol. This has come off the back of the new build nuclear power station at Hinkley Point and associated requirements.

For a detailed breakdown of Q4 2013 availability by grade, please click here or on Chart 1 to the left of this article.

 

 

Large deals drive average deal size to over 5,000 sq ft.

2013 take-up in the city centre reached 504,508 sq ft, a 23% improvement on 2012 and 18% higher than the five year average. This was helped by the Grade B & C Q4 take up which rose significantly from 18,594 in 2012 to 56,173 in the same quarter this year.

Overall though impressive rise was largely due to two large freehold deals: one to Bristol City Council of 71,000 sq ft and one to Imperial Tobacco of 85,000 sq ft. These helped to increase the average deal size to over 5,000 sq ft for since first time since 2008.

In Q4 out of town, take-up reached 43,756 for Grade B & C offices, which is up on last year, but Grade A take-up was only 7,407, which is down on 2012.

For a detailed breakdown of Q4 2013 take-up by grade, please click here or on Chart 2 to the left of this article.

Key Bristol office lettings, Q4 2013

Property Size (sq ft) Landlord (s) Tenant / Purchaser
Lewins Place (Developer purchase) 107,000 Aberdeen P G Group
1 Temple Quay 20,662      Bank of Ireland  12 offices
210/240 Aztec West 6,638 Hansteen Skanska

Prime rents set to remain static until Skanska complete on 66 Queen Square in mid-2015

Out of town, prime rents have remained at £20 in Q4 2013; however, any deals on Bristol Business Park have usually been at a higher level.

Prime city centre rents have remained static at £27.50 in Q4 2013, as they have over the last five years. They will remain at this level until Skanska complete their scheme at 66 Queen Square in mid-2015 when they are looking to increase this up to £29.50.

For a detailed breakdown of Q4 2013 prime rents, please click here or on Chart 3 to the left of this article.

Rise in investment activity supports an improving market

Portwall Place was purchased out of NAMA (IBRC) by BlackRock UK Property for £50m (7%). This 162,500 sq ft, multi-let city-centre office deal is the largest in the South West for over two years. 

Redcliff Quay sold a 108,000 sq ft multi-let city centre office to Legal and General UK PUT for £20m (10%).  The quoting price was £24m (8.27%).

Park Gate, 2000 Aztec West, sold for £18m (6.9%) off a quoting level of £16.565m (7.5%) to an overseas investor. This 68,000 sq ft out-of-town office was let to EE for a 14 year term.

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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