Bristol office market improves – JLL
JLL says last year saw the return of the “off-plan” transaction in Bristol’s city centre, with Simply Health acquiring 53,000 sq ft at Redland House after the developer purchase of the building by Stoford, and with 25,000 sq ft under offer at Crest’s Harbourside development, 2 College Square.
In its latest review of the market for office space in Bristol, JLL notes that the size and quality of deals done last year improved, with nine deals on Grade A space totalling 127,759 sq ft, more than twice the total recorded in 2009. The firm says this possibly results from occupiers driving value from landlords who are keen to let space and reduce their liabilities. In total, there were 91 deals in the city centre of more than 1,000 sq ft in 2010 – of these, 57% were below 3,000 sq ft and there were eight deals of more than 10,000 sq ft.
Stock in Bristol city centre remains at about 16.5m sq ft. Total take-up in the city centre and Clifton in 2010 was 458,823 sq ft compared with 327,475 sq ft in 2009. This is still 25% down on the 10-year average of 613,000 sq ft, JLL notes.
The supply of Grade A stock fell to 334,177 sq ft at the year-end, compared with 370,000 sq ft at the end of 2009. There is only 110,500 sq ft currently under construction, and this is in a single scheme – Bridgewater House at Finzel’s Reach, which is due to complete by the summer of this year.
JLL says headline rents in the centre of Bristol have peaked at £27.50 per sq ft, from the £27.00 achieved in 2009, but it notes that rents remain very fragmented and says enquiry levels are modest and have no pattern. It expects take-up this year to be similar to that seen in 2010.
The Bristol out-of-town market saw a 33% increase in take-up during 2010 to 401,343 sq ft, with the largest deal being North Somerset Council’s purchase of Castlewood, Clevedon totalling 83,641 sq ft in the first quarter of last year. JLL says the occupier base out of town remains diverse. It notes that nothing is currently under construction and the availability of prime buildings is limited, with three currently available at around 30,000 sq ft and one having part under offer. The current headline rent remains £21.00 per sq ft and take-up this year out of town is expected to be more in line with the 10-year average.
