Bristol office take-up soars in 2016

Office investment in Bristol continues to go from strength to strength as investors seek to take advantage of soaring take up levels in the city.

Take up levels of Bristol city centre offices looks set to reach 800,000 sq ft in 2016, 50% above the five year average of 533,000 sq ft, supported in part by growth in energy firms continuing their activity in the city following the approval of Hinkley Point in September, according to Savills.

Overall, Bristol’s office market was driven by high demand from TMT, professional and energy occupiers taking space in the city, which largely explains why office investment in Bristol is currently an all-time high. This influx has resulted in a significant decrease in the supply of city centre Grade A stock, with levels currently at 117,116 sq ft.

In its latest research the property advisor notes that in order to cope with the demand, landlords, particularly those with TMT tenants, are refurbishing their offices, with the refurbishment/redevelopment pipeline at an estimated 300,000 sq ft.

Christopher Meredith, director in the business space team in Savills, Bristol, commented: “The Bristol office market has benefited from constant interest from occupiers, however Grade A stock is in short supply and the Aurora building is currently the only speculative development in the city.

“Looking ahead to 2017 we expect to see tenants shift their attention to pre-lets as the Grade A market continues to be constrained and demand for space remains strong.”

Savills notes that as a result of increased demand rental growth has been seen in both Grade A and B stock in Bristol. Refurbished office space is now reaching rents of £27 per sq ft in Grade B stock, just below the headline rent of £28.50 per sq ft.

It is predicted that in 2017 rents on Grade A space will reach and exceed £30 per sq ft.