Market snapshot

Office Market Pulse Bristol Q2 2014

This quarter has seen a massive increase in the year-on-year deal figures, an encouraging trend which we believe is set to continue into the second half of the year.

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:

Lack of grade A deals; short term anomaly

The limited grade A deals in the city centre and none out of town is likely to be a short term anomaly as several are in the pipeline for completion in Q3. 

Fears of a lack of grade A space in town are still real, but at present rates, the erosion of the existing stock is proving to be slower than many predicted. With several large deals on the horizon this balance is liable to flip very quickly.

There are still no new developments in the out of town market and as a series of big deals prepare to take the majority of large space off the market, a shortage of good quality space is becoming a reality.

For a detailed breakdown of Q2 2014 availability by grade, please click here or on Chart 1 to the left of this article.

Massive increase in year-on-year deal figures

Q2 2014 saw a 175% increase in take-up from the same quarter the previous year. Out of town take-up was over double that of 2013 at 111,711 sq ft and city centre take-up was three times higher at 179,628 sq ft.

Total take-up for half year stands at 515,302 sq ft; significantly higher than 418,191 sq ft for the same period last year.

We predict a continuation of these encouraging levels into the second half of the year taking us well above the 5 year average of circa 700,000 sq ft.

For a detailed breakdown of Q2 2014 take-up by grade, please click here or on Chart 2 to the left of this article.

Key Bristol office lettings, Q2 2014

Property Size (sq ft) Landlord (s) Tenant / Purchaser
 Cascade One, Aztec West  28,885  Private Investor  Protection Group International
 Westward and Nicholson Houses  28,003  Audit Commission  The Higher Education Funding Council
 Kings Orchard, City Centre  15,200  Bevan Brittan  Tribal Group

Prime rents have consolidated and are predicated to rise in 2015

City centre rents will remain stable this year. But should rise with new stock to the market in 2015.

Out of town, a lack of Grade A stock is resulting in competition from occupiers for the best space, creating the conditions for rents to rise. With little stock coming to the market and no plans for speculative development in the immediate future this is likely to continue.

For a detailed breakdown of Q2 2014 prime rents, please click here or on Chart 3 to the left of this article.

Increase in investment activity continues to boost market confidence

Invesco has sold The Paragon, a six-storey, 75,373 sq ft building on Victoria Street, to Lothbury Property Trust for £29.45m (5.9%). Tenants include law firm Thrings, accountants Ernst & Young and international HR and finance consultants Mercer.

WestOne is on the market for in excess of £10.14m (6.5%). The Grade A, city centre building currently comprises a headquarters office extending to 26,928 sq ft NIA, with an additional lower ground floor level of 3,875 sq ft which has now been fitted out for office use.
The headquarters space is let for a term of 15 years without break from 1st April 2011 to Triodos Bank NV - one of the world’s major ethical banks. The lower ground floor will be subject to a 2 year rent, rates and service charge vendor’s guarantee. Total gross rent is £731,337.75 per annum (£263.7 per m2 / £24.50 per ft2 on the headquarters element). The net rent is £697,337.75 per annum.

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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