Legal, financial and media firms helped lift Bristol's city centre office take up to 425,000 sq ft in 2011 – just 7% down on a year earlier. Overall take up in and out of town was 700,000 sq ft in what commentators admit was a challenging market.
The figures come from Bristol offices specialist James Preece of Colliers International.said the majority of moves had been in the small to medium sectors with an increase in 10,000 sq ft -15,000 sq ft take up but a corresponding drop in the key 15,000 sq ft – 25,000 sq ft sector.
The three largest transactions were the pre-let of 2 College Square (26,300 sq ft) to CMS Cameron McKenna, the letting of West One, Deanery Road (27,221 sq ft) to Triodos Bank and the letting of the West Wing, Glassfields, Temple Quay (27,224 sq ft) to Creston.
Top grade A buildings maintained a headline rent of £27.50 per sq ft, with incentives between 3 to 3½ months per year of the term. Top tier grade B rents remain in the high teens and lower tier grade B around £10.00 per sq ft. Incentives for grade B properties are typically around 2 to 3½ months per year. There are still high levels of grade B stock whilst grade A availability is down to 364,000 sq ft.
These findings broadly echo a report from GVA last week which warned that a number of cities across the UK, including Bristol, are in a position where take-up is going to be reduced as a result of the lack of future supply. "In some cities this is already feeding through to headline rent increases although we haven’t yet seen that in Bristol where headline rents are staying firm at £27.50 per sq ft," said GVA.
According to Colliers, however, the out of town market fell 32% compared to 2010 with 273,000 sq ft of take-up, although this was only 16% below the long term average.
James Preece said: “As with the in-town market the most noticeable difference in 2011 was a lack of large deals.” The largest transactions of the year were the lettings of 22,740 sq ft at the Pavilions to PADI, Motability taking 20,765 sq ft at Building 440 Bristol Business Park and Lysander House, securing a letting of 18,796 sq ft to Brightside Group.
Grade A rents remain in the £20–£22 per sq ft range, with top tier grade B between £15–£18 per sq ft. The lower tier grade B rent range is between £10–£14 per sq ft. Incentive levels have also remained in general between 2½ to 3½ months per year of the term certain.
He concluded: “There are a number of sizeable deals that are due to complete in the first half of 2012 which should assist in reducing the high level of supply.
“Given the various economic issues reported during 2011, many companies chose not to relocate despite the pendulum remaining in favour of tenants seeking new accommodation. The high level of overall supply will mean that rents are likely to see very limited if any growth during 2012.”
