Bristol’s office market is showing marked signs of improvement with a 50% increase in take-up compared to the same period last year, according to one of the city’s leading property figures.
Phillip Morton, head of agency and development at agents CBRE’s Bristol office, said a major deal and the first speculative scheme since the start of the recession in 2008 made the first quarter of 2013 the most active for many years.
As a result there are now real reasons to be optimistic, he said.
The biggest deal in the city over the three months to the end of March was Bristol City Council’s purchase of 100 Temple Street.
The local authority will be using the vacant 70,000 sq ft offices – the former base for accountants KPMG – for its staff as part of a major reshuffle of its property portfolio across the city.
And while there were no further announcement regarding the city centre’s two largest office blocks, at Temple Back and Bridgewater House in the Finzels Reach development on the former Courage Brewery site, at least one more deal is imminent.
And most important of all, according to Mr Morton, the first speculative development in Bristol since for five years was announced. Developer Salmon Harvester is due to speculatively build 2 Glass Wharf, a 90,600 sq ft office block at Temple Quay and part of Bristol’s Temple Quarter Enterprise Zone.
The building, which will be next door to law firm Burges Salmon, was put on hold in 2008, but with planning permission already in place and the groundworks completed, the scheme is due to be completed within 18 months. When finished, it will increase office supply by around 25% in the city centre.
“The fact that a major speculative scheme is taking place in Bristol has to be a good sign for the property market,” said Mr Morton.
“Salmon Harvester must be confident that there is demand for Grade A office space otherwise they would not be pressing ahead with the scheme. There are signs that demand is returning for top quality offices which has to be a good thing for the market as a whole in Bristol.”
However, the picture is not as positive when it comes to the out-of-town office market. Although take up was 81,650 sq ft, it was still down by just under a quarter at 23% compared with the same period last year.
Nevertheless, there was a major boost for the market with a large deal by Nvidia at 930 Aztec West for 30,450 sq ft of office space, said Mr Morton. Meanwhile, a freehold purchase of the 25,500 sq ft building 300 at Aztec West by Spire Healthcare will result in the office building being converted for new use.
“Ironically, the out of town market has been more robust in recent years as a result of the fact that it has been much more competitive,” added Mr Morton. “The market is still very price sensitive but there is some evidence that demand is returning for Grade A office space in prime locations.”
