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What will investors be focusing upon in Bristol and the South West in 2021?


Investment in Bristol and the South West in 2021 will reflect the challenges and opportunities resulting from COVID-19.

As 2021 gets underway with the effects of the pandemic creating more of the turbulence that characterised 2020, it seems reasonable to predict that the key theme for capital markets this year will be mitigating risk, with investors prioritising long term income over more high-yielding, riskier assets.

In terms of what this means for Bristol and the South West, we anticipate that strongest investor demand will continue to be for well-let and well-located distribution units across the region.

Hot sector

Industrial was very much the hot sector for investors in 2020, driven by its pivotal role during the COVID-19 crisis as consumers turned to ecommerce and grocery companies. Other investment attractions of industrial have been strong demand, rental growth and a relative lack of supply on the whole across the sector, together with long leases, often coupled with indexation.

The largest transaction of 2020 involved developer Panattoni UK selling the forward funding of their 2.3 million sq ft warehouse pre-let in Swindon to Legal & General Investment Managers (LGIM) for in excess of £200m at a yield of 4.3%.

Colliers acted for Panattoni in the pre-let deal, and Colliers is also acting on behalf of the developer Mountpark on Mountpark 360, which extends to 359,500 sq ft and will be the largest speculative unit in the South West. It will be available from July 2021 and we expect to see keen investor interest. This interest will undoubtedly be heightened if the Bristol Freeport Zone bid is successful in becoming one of the UK’s 10 post-Brexit freeports.

Rising popularity

In addition to investor focus upon industrial, we are expecting to witness the rising popularity of the residential sector combined with a growing investor appetite for the PRS (Private Rented Sector) model.

South West total investment volumes for 2020 were £1,291.50m, with Panattoni’s Swindon sale in September the largest transaction in the region. The 2020 figures compare to investment volumes of £1,792.82m in 2019 and reflect a 28% decline year on year.

Bristol investment volumes for the year were £529.38m compared to £588m in 2019. It is of particular note that despite challenging market conditions the 2020 figures for Bristol show a fall of just 10% in investment volumes compared to 2019 levels, which bodes well for the market in 2021.

There were two significant student transactions during the year; DWS’ forward purchase of F3GROUP’s 357 bed scheme in Redcliffe for £57m and Print Hall a 267 bed scheme that completed in 2017 was purchased in a joint venture between Harrison Street and GSA for £58.2m. Away from the student sector, other notable transactions during the year included British Land’s sale of the Tesco Extra in Brislington to Tesco for £42m, Abstract’s sale of Babcock’s office at Bristol Business Park to Aviva for £55.195m and Tesco Pension Fund’s forward funding of Halo, Finzels Reach, the largest new office development to have started in Bristol in 2020.

This Grade A office building totalling 116,133 sq ft is due for completion in Spring 2022, and almost two thirds of the building, some 74,000 sq ft, has been pre-let to legal practice Osborne Clarke, and forward funded by Tesco Pension Fund in a £70 million deal in Q2 2020 widely regarded as a major vote of confidence in Bristol.

Market fundamentals

The underlying market fundamentals of both the South West and in particular Bristol in remain good, and they will continue to attract investors.

As one of the UK’s Big Six cities, Bristol looks well-placed for continuing office, industrial and residential development. The city centre has always been a strong office location, with the lowest Grade A vacancy rate of major UK cities. This has been reflected in strong rental growth in recent years, with a record rent of £37.50 per sq ft being achieved in 2019, which was the highest top rent in UK regional city office markets. 

Although the Bristol office market will undoubtedly see some changes as a result of the pandemic and employees having to work from home, there could be opportunities for landlords to remodel some of their buildings with an enhanced focus on collaborative space. For many employers this will be essential for maximising their office space and is likely to be a key driver in encouraging employees back to their offices in 2021.

We are already seeing Bristol city centre schemes being brought forward. EQ, which is a speculative 200,000 sq ft development by CEG, is underway, and Nord has recently commenced construction of One Portwall Square, a new 33,750 sq ft office building where AHMM has agreed a pre-let of part of the building.

* This is an updated version of an article that originally appeared in the Winter 2020 issue of Spotlight, the magazine produced by the Bristol office of Colliers International.


About the Author

Richard Coombs is a director in the National Capital Markets team with particular responsibility for investment in the South West. He has advised clients including Patrizia, Mayfair Capital, Aberdeen Standard Investments, Columbia Threadneedle Investments and Castleforge Partners for more than 25 years in the acquisition, sale and funding of investment property. To get in touch, please email

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Richard Coombs


National Capital Markets


Richard Coombs is a Director in the UK National Investment team with particular responsibility for investment in the South West. His specialist area is business space although he also provides advice to clients across all major sectors of the market.  Richard has advised clients such as Aviva Investors, Patrizia, Mayfair Capital, Aberdeen Standard Investments, Columbia Threadneedle Investments and Castleforge Partners for more than 25 years in the acquisition, sale and funding of investment property.

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