Office take-up in Bath in the 12 months leading up to the end of June 2017 totalled 93,267 sq ft, up 6 per cent on the 10 year average, according to LSH’s annual South West Office Market Report, which provides investors, developers and occupiers with detailed insight into Bath’s supply, demand and deals activity,
However, as a result of the chronic lack of supply, the first half of 2017 in isolation was quieter than the last six months of 2016, with take-up of just 27,917 sq ft. The largest deal was Clarendon Business Centre’s 14,000 sq ft lease at Cambridge House South.
Commenting, Peter Musgrove, Head of Office Agency South West at LSH said: “Bath is a very attractive location for occupiers, but the acute shortage of supply restricts leasing activity.”
“Any peaks in take-up are largely as a result of good quality offices coming onto the market which are quickly absorbed.”
“There are limited options for expanding companies to stay within the city, and the trend we are witnessing is that many are forced to consider relocating to Bristol where there is more choice for modern occupiers.”
The report highlighted that the amount of quality office space available in Bath stood at 305,000 sq ft in 2012 but is currently just 95,217 sq ft. This equates to a little over a year’s worth of supply, one of the lowest of any UK city.
Bath has also lost much of its office capacity at around 200,000 sq ft in the last few years, due to office stock being converted into residential accommodation.
However, the report pointed to a number of new developments in the pipeline due to bring much-needed office space to the market, including Bath Quays South, part of the city’s Enterprise Area, which is set to provide 90,000 sq ft of offices when it completes in 2019.
Nearby, TNC plans to develop Bath Quays Studios with 40,000 sq ft of office space targeting smaller tech occupiers, while Bath Quays North has permission for 200,000 sq ft of offices with work expected to start in 2019. Developer Ediston Real Estate also plans to speculatively develop 113,000 sq ft of Grade A at Pinesgate.
“Bath has outstanding credentials as an office location, with inherent demand from occupiers, but it has been held back by an ongoing lack of space,” says Peter Musgrove. “While we can see that take-up in 2017 will be down on last year, these exciting new developments will bring much-needed stock to the market and crucially, should help retain expanding companies in the city.”
While the report predicts that prime office rents in Bath will remain stable due to a lack of supply, it forecasts that the new developments at Bath Quays will trigger rent rises beyond the current level of £31 per sq ft when new space comes to the market.
To download a copy of the South West Office Market report, please click here