An historic building-turned-media hub in Bristol’s Finzels Reach regeneration area has become the latest to be sold as the commercial property market continues to view the city as an investment hotspot.
The Fermentation Buildings, pictured, whose occupiers include Channel 4, was sold to Mendip District Council for £11.9m by Bristol-based developer Cubex and its funding partner Fiera Real Estate. 
The building’s newly renovated office space is let to high-profile organisations such as Historic England, English Heritage, Outlaw and Ecosurety as well as Channel 4 – which opened its new creative hub there last October.
The ground floor leisure space fronting Hawkins Lane, which runs through the heart of Finzels Reach, is now home to a new Bocabar restaurant and bar and wine lounge and shop Le Vignoble.
The sale follows an active final quarter of 2019 for Bristol’s city centre office market, when 28 deals totalling an unprecedented 330,000 sq ft were completed – although much of that was accounted for by BT pre-letting space at AXA/Bellhammer’s speculative The Assembly mixed-use development on Temple Way.
The total is ahead of the five-year average for the period and brings the annual total take up to 693,909 sq ft – ahead of both the five and 10-year averages.
The city centre vacancy rate is now 4.6% – close to a record low – with just 92,000 sq ft under construction at Royal London’s Distillery scheme at Glassfields, also on Temple Way.
Other deals over 10,000sq ft included Instant Group taking 33,000 sq ft at Temple Point, Bishop Fleming’s acquisition of 13,000 sq ft at the fifth floor of 10 Templeback and Runway East expanding into a further 12,053 sq ft of new space at 101 Victoria Street.
In addition to achieving the largest deal on record the city centre has also set a new record rent, with EPIC UK’s recent refurbishment of 22-24 Queen Square achieving £37.50 per sq ft for a letting of 3,820 sq ft to Shaw & Co – although this is viewed as a one-off deal and not reflecting a move to higher rents in other city centre prime office buildings.
JLL director of office agency Ian Wills said: “BT was the stand out deal of 2019 and illustrates how important new office supply is to allow major employers to grow in our city. Almost all new build and refurbished schemes in Greater Bristol saw deals in 2019 despite some challenging economic times.”
Hartnell Taylor Cook office agency partner Chris Grazier added: “2019 has shown how resilient the Bristol market is and this means that 2020 has good prospects not only for developers looking at delivering new build and refurbished buildings to the market but also for occupiers as a new wave of much needed office stock enters the market.”
The sale of Fermentation Buildings represents one of the final elements of phase one of Finzels Reach to be sold by Cubex and Fiera Real Estate with the estate now in the shared ownership of a collection of institutional and private investors.
Hawkins & George, the new fully let build-to-rent apartments, were handed over to Grainger last year, and cutting-edge green office building Aurora was sold to Royal London Asset Management. AXA forward funded the Premier Inn hotel and Bridgewater House was purchased by a private European investor.
Cubex now has its sights set on future development opportunities in regional cities and towns across the South West and Wales, while it will also be forging ahead with work on the second phase of Finzels Reach, including the Halo mixed-use scheme on the former fire stations site.
Cubex director Peter Walford said: “This sale marks an important milestone for us in our journey to transform this once derelict city centre site into a vibrant new quarter providing high quality, unique places for people to live, work and socialise.”
