The Bristol office market experienced significant rental growth in 2017 as prime rents grew from £28.50 per sq ft to reach £32.50 per sq ft, an increase of 14%, according to Savills.
Demand from technology, media and telecoms (TMT) firms and the public services have driven take up as a lack of Grade A stock continues to drive rents upwards.
The firm notes that the TMT firms accounted for 22% of take up, while the public services sector accounted for 21% of take up.
Total take up of office space in Bristol reached 610,666 sq ft in 2017, in line with the long term average. Notable deals included the combined 56,059 sq ft leased at Cathedral Square by Dyson and the University of Bristol, with Dyson setting the new headline.
Elsewhere Simmons & Simmons and Mewburn Ellis agreed to lease 26,985 sq ft and 13,326 sq ft respectively at the speculatively developed Aurora building.
The sustained demand for office space has led occupiers to look increasingly at refurbished schemes such as Programme and One Brunswick Square according to Savills.
There is particularly high demand for floorplates of 10,000 sq ft with the market tight at all size parameters but especially so at sub 5,000 sq ft.
The popularity of refurbished space has impacted on rents with there now being no gap between the rents achieved on new build and refurbished space.
Chris Meredith, director in the business space team at Savills Bristol, comments: “2017 was a highly successful year for the Bristol office market with top rents moving to above £30 per sq ft to compete with cities such as Manchester, Birmingham and Edinburgh.
“Looking ahead to 2018 we expect take up to continue to be driven by TMT firms, and serviced office companies looking to take more space.
“The lack of available office space remains an issue even with schemes such as Aurora and Programme both welcoming the first wave of new tenants in 2018 and progress being made on Engine Shed 2.”