Total take-up of offices (over 1,000 sq ft) in Q4 2016 was 267,239 sq ft, compared with just 93,604 sq ft during the same period in 2015.
Total take-up has exceeded the five year average.
A stand out performance in the city centre has seen take-up for the year increase dramatically when compared with 2015. The letting of 107,000sq ft to HMRC at 3 Glass Wharf is the key deal for this quarter and the most significant transaction for the year. There were just three other grade A deals in Q4 2016: 2 Glass Wharf, The West Wing Glass Wharf and 31 Great George Street.
This activity represents an increase in the number of prime deals compared with previous quarters, but with supply being taken out of the market and only one building currently being built speculatively, we expect to see shortages in the coming months.
The grade B city centre market has also seen increased levels of take-up with several deals of over 10,000 sq ft, including lettings at South Quay House, Redcliff Quay and the purchase of Victoria House for owner occupation.
The out of town market has also performed well this quarter, and exceeded the total take-up figure of 2015, with a total of 308,380 sq ft. There were two key deals of more than 30,000 sq ft in this market, including the letting of 100 Bristol Business Park to Babcock. This site has recently been acquired by Abstract Land which is committed to redeveloping the existing 80,000 sq ft building to create more than 150,000 sq ft of space. This is due to be pre-let to Babcock. The other key letting of 30,430sq ft was to Highway England at 930 Aztec West.
In our view, the UK’s decision to leave the EU has still not affected occupational take-up in the region, although we wait to see if this may change when the process for leaving the EU is announced in the coming months.