Take up of Bristol office stock reached circa 220,000 sq ft in the city centre in the first half of the year, while out of town reached circa 95,000 sq ft according to the latest Bristol Snapshot from Colliers. The research also shows that in Q2, the city centre doubled the levels seen year-on-year, reaching 103,498 sq ft.
Twenty deals were recorded in Q2 21, compared to just nine in Q2 20. Take up was driven by the smaller end of the market notes Colliers, with 80 per cent of city centre deals being sub 3,000 sq ft.
James Preece, National Offices director at Colliers Bristol, commented: “We certainly saw an uptick in demand in the second quarter, however this has yet to translate in to the take up figures. With the Passport Office currently seeking 100,000 sq ft and the BBC taking 60,251 sq ft at Bridgewater House in Q2 there has been a real commitment from big public sector bodies, driving their proportion of take up to 58 per cent.”
Colliers notes that vacancy in the city centre rose slightly to 7.2 per cent due to the completion of 91,673 sq ft at Royal London’s Distillery Scheme, while headline rents remained stable at £37.50 per sq ft.The out of town market recorded 33,259 sq ft of take up in Q2 and despite a lack of larger transactions of over 6,000 sq ft, three times as much space transacted in Q2 21 compared with the same period of 2020. Prime rents remain stable at £22.50-£23.50 per sq ft.
James continued: “There was a real uptick in medical related requirements this quarter and we expect this to feed through into the figures as we go through the year. Looking back on the first half of the year there haven’t been many large deals in the out of town market, however the average deal size in H1 was 4,739 sq ft compared to just 3,070 sq ft in H2 2020 showing things are moving in the right direction.”
Office investment into Bristol reached £27 million in the second quarter of the year, down on the Q1 volume of £85 million which was boosted by the £75 million sale of Temple Quay House notes Colliers. Key deals included the purchase of St James Court by the NHS for £12.4 million, Wyndham Court by UKRO for £6 million and Lewis Investment’s purchase of Charlotte Place for £5 million.
Carys Allen in the National Capital Markets team at Colliers Bristol, adds: “As the investment volumes show, market conditions have been challenging so far this year, with a lack of new opportunities being brought to the market. However, demand for prime assets is reasonably strong with a number of active investor requirements for city centre offices. We anticipate momentum will build during Q3 and Q4 of this year as we adjust to the easing of COVID restrictions and we see a greater number of people returning to the office.”
