Leading national consultancy Lambert Smith Hampton (LSH), has revealed that the Greater Bristol office market saw a significant uplift in the take-up during the second quarter of the year.
Despite a subdued start to 2019, the Bristol office market recorded 212,975 sq ft of transactions in Q2 with the city centre delivering more than double the number of deals seen in Q1.
Finola Ingham of commercial property consultancy Burston Cook remarked: “Following a slow start to the first quarter of the year, take up is back on track, activity has picked up and quoting rents are increasing. Demand remains healthy for offices across Bristol city centre and Clifton, and whilst some might have expected more uncertainty in the market with Brexit looming, there is still a good level of demand for city centre offices”.
The city centre transacted 177,633 sq ft across 35 deals which is ahead of the 5-year average.
In addition to the strong take-up, there was a flurry of serviced providers taking space, with the three largest deals of the quarter including Clockwise’s purchase of The Generator Building, Finzels Reach from Cubex, which totals 30,611sq ft, followed by Spaces taking 26,500sq ft at Resolution’s Programme and Landmark Space’s expansion into a further 9,781sq ft at One Temple Quay.
In contrast, the out of town market saw lower than expected levels of take-up with a total of just 35,342 sq ft from 11 deals, recording less than half of the 5-year average,
Outside of the town centre, there has been a noticeable lack of larger deals, with none of the 11 deals recording over 10,000 sq ft, and only one in excess of 5,000 sq ft.
LSH state that typically Bristol’s out of town market is predominately made up of professional service occupiers linked to the Ministry of Defense or other government bodies. However, with the continued uncertainties around Brexit, many of these out of town contracts have been put on hold, leading to reduced demand in this market.
Highlighting the detrimental effects of Brexit on the market, Richard Kidd, Senior Director of Office Agency at CBRE said: “Brexit appears to be causing some hesitation amongst companies considering a relocation, particularly in the out of town market where the aerospace and defence industries may be more exposed to international markets. However, the city centre remains resilient in terms of demand, and with limited supply, we are still seeing increases in headline rents across the board.”