LSH’s Office Market Pulse, which gives investors, developers and occupiers detailed insight into the Greater Bristol area, confirmed that the pre-let of 85,790 sq ft of new building space to Babcock, at 100 Bristol Business Park, was the biggest transaction in the South West since 2007. The deal, negotiated by LSH, boosted the total out of town take-up to a buoyant 142,063 sq ft in the final three months of last year, representing an increase of 28% on the same period last year and pushing it well above the five year average.
The city centre also performed well in Q4, with several deals in excess of 25,000 sq ft crossing the line before December. These included the lettings by LSH to Dyson of 28,718 sq ft at One Cathedral Square, and 27,341 sq ft to the University of Bristol. Not only were these two Cathedral Square transactions the largest city centre deals this quarter but the Dyson letting took Grade A rents in Bristol to a new high of £32.50 per sq ft.
Commenting, LSH Head of Office Advisory Peter Musgrove said that as well as requirements for larger office space, Bristol was also seeing strong demand from occupiers for smaller sized suites. “Much of this demand is coming from the TMT sector (technology, media and telecoms) as new and growing businesses look to expand from incubator space into their own office accommodation,” he said.
“As a tech hub, Bristol has performed very well with the TMT sector in the past and this is set to continue. Overall, the city is poised for a positive performance in 2018.”
Lack of options for occupiers
However, the lack of supply was continuing to pose a challenge for occupiers looking to move premises, Peter said. “The final quarter of 2017 saw over 100,000sq ft of grade A space taken from the market and with no new stock being brought to the market, supply of grade A space is now at an all-time low.”
“Looking to later this year and to 2019 and 2020, there are concerns over what new space will be brought to market. It is important that the market continues to supply good quality office space to meet the needs of ‘future Dysons’ so that we do not lose these occupiers to other cities able to provide the calibre of space that they require.”