Bristol office rents are set for further rises this year following a strong 2017, in which Grade A rents in the city centre increased by 14%.
Commenting on recently-released take-up figures for Q4, James Preece, national offices director in the Bristol office of Colliers International, said it was significant that the long-awaited £30 per sq ft barrier for Bristol city centre office rents had been cleared in Q3 and that prime rents then pushed on further to £32.50 per sq ft in Q4.
Preece said: “The fundamentals of the Bristol office market remain very robust with further increases in rent likely during 2018.
“In the city centre, Grade A rents have increased by 14% this year to £32.50 per sq ft. Grade B rents had already witnessed large uplifts in the last few years and edged up to £27.50 per sq ft in 2017.
He added that the out of town office market had also performed strongly in Q4, seeing the largest level of quarterly take up at 142,000 sq ft – up 6% on Q3 2017 – on what was already a strong quarter that reflected a robust 2017.
Preece continued: “2017 was another excellent year for the Bristol office market with over 1 million sq ft taken up yet again.
“The out of town market performed exceptionally well, whilst the city centre saw a lack of supply cause take up to marginally drop below the five year average.
“Out of town take up in 2017 totalled 425,000 sq ft – a massive 26% above the five-year average.”
Last year was the third time in four years that overall office take-up in Bristol has surpassed one million sq ft.
City centre take-up in 2017 totalled 614,000 sq ft. Three of the four largest deals in 2017 completed in Q4. These included Dyson and the University of Bristol taking 56,000 sq ft between them at Castleforge’s One Cathedral Square, which set the new prime rent, and Simmons & Simmons committing to a pre-let of 27,000 sq ft at Cubex’s Aurora, the only speculative scheme in the city centre.
The University of Bristol acquired the most space in Bristol city centre in 2017, in three separate transactions.
Take-up figures out of town for 2017 were boosted by Babcock signing up to 86,000 sq ft at 100 Bristol Business Park, which was the largest deal of the quarter and also of the year by some margin.