A strong final quarter in 2021 saw Bristol centre office take-up bounce back to a level not witnessed since before the pandemic at 250,000 sq ft, according to Colliers’ latest Bristol snapshot report. As a result, annual take-up ended 2021 just six per cent below the five-year average compared to -19% in 2020, demonstrating market resilience.
31 transactions were completed in the final quarter in the city centre, by far the busiest of the year, with four deals over 20,000 sq ft while 71 per cent of the deals were below 5,000 sq ft. Undoubtedly the largest deal of the quarter (and year) was the University of Bristol taking a lease of 74,000 sq ft at 1 Trinity Quay Q4 2021. In addition, BIMM signed for 33,000 sq ft at St James House and Arup took a pre-let on 27,000 sq ft at CEG’s EQ on Victoria Street.
Looking across 2021 for Bristol city centre, the average deal size was 4,210 sq ft compared to 7,453 sq ft in 2020. The education and public sector accounted for four out of the five largest deals. With regards to occupier diversity, financial services remain the most active, accounting for 25 per cent of deals, however demand was also spread across other sectors, including the tech and media market, which continued to grow in importance (12 per cent).
James Preece, director, National Office Agency at Colliers Bristol commented: “While Grade A availability in Bristol city-centre rose in 2021 due to speculative completions, there is plenty of occupier appetite to absorb prime space. The anticipated flight to quality is set to drive Bristol rents to record levels in 2022. We have already seen a surge in city centre prime rents to £38.50 per sq ft in Q4 and we expect this to move above £40 per sq ft this quarter.”
In contrast to the city centre, Colliers’ research highlights that out-of-town take up for the quarter reached 58,000 sq ft, although this still exceeded the Q4 2020 total. Overall the out-of-town office market had a difficult time in 2021 with take up being 31% below the five-year average. The largest deal of the quarter was KKP Group’s purchase of the LLH of 14,500 sq ft at Beech House, Brotherswood Court in North Bristol.
Guy Grantham, director of research and forecasting added: “With demand moderately below trend in the out of town market, there is limited upward pressure on prime rents with levels currently standing at £23.50 per sq ft. Last year the market was driven by smaller requirements, the average deal size was 4,210 sq ft. Demand is slowly improving out of town and we expect take up to improve during the course of 2022.”