Final quarter of 2019 saw city centre prime rents reach a new high, and notable take-up of 332,000 sq ft.
The resilience of the Bristol office market has been underlined by an impressive close to last year that bodes well for 2020, according to real estate advisors Colliers International.
The recently published ‘Quarter 4 2019 Bristol Offices Snapshot’ from Colliers International shows city centre prime rents reached a new high of £37.50 per sq ft during the period.
Take-up in the final quarter was the highest of the year, with a remarkable 332,000 sq ft in the city centre. This was 80% higher than the second largest quarter of the year and almost 3.5 times more than the final quarter of 2018. Take-up during Q4 was boosted by the largest deal of the year, with BT’s pre-let of just over 200,000 sq ft at Assembly Bristol.
The out-of-town market also saw a new prime rent, with £23.50 per sq ft reached at Aztec West. However, out-of-town deals in Q4 reached only 55,000 sq ft of take-up, which was similar to that in the previous quarter but over 50% down on the same period in 2018. For 2019, take-up totalled only 244,700 sq ft, which was 34% below the five-year average.
“This demonstrated the resilience of the market in a year of political and economic uncertainty. Prime city centre rents grew by 7%, further reflecting this strength.”
He added: “We have seen record prime rents achieved in the city centre in 2019, due to the lack of supply and continued demand for Grade A space.
“In addition, we have already witnessed the pre-let of 74,000 sq of office space that is due to come to the market in 2021. This clearly demonstrates the low level of vacancy and strength of the Bristol city centre office market.”
The Colliers report shows that take-up in Bristol city centre during 2019 totalled 693,900 sq ft, which was approximately 7% above the five-year average, the trend towards diminishing supply continued throughout the year.
Unlike in 2018, there was no newly completed office space in the city centre, and this contributed to record low year-end vacancy rates, and an overall vacancy rate that now stands at 4.9%, with Grade A vacancy of just 0.8%.
New space will come to the market in 2020 in two new buildings with 292,000 sq ft of new space: The Distillery-Glassfields and Assembly. However, only 92,000 sq ft at The Distillery-Glassfields will be available to let, as Assembly was pre-let in its entirety to BT.