Colliers International says lack of new development will boost refurbishment of existing office buildings in 2019
That is the view of James Preece, director in the national offices team at property agents Colliers International in Bristol.
Mr. Preece says that overall take-up in the city – both in and out of town - reached 932,600 sq ft last year, which is only 5 per cent below the five-year average.
Take-up in the city centre totalled 532,000 sq ft, which was slightly subdued although Mr. Preece says that a number of larger ongoing deals are now to due to complete early this year. The largest city centre deal to complete in Q4 of 2018 was MM Teleperformance taking a lease of 15,000 sq ft at Spectrum, followed by Epic Systems taking 13,500 sq ft at Hartwell House.
Meanwhile total out of town take-up last year stood at 400,500 sq ft - which by contrast is 19 per cent above the five-year average. The biggest deal of the year was the University of the West of England purchasing 77,700 sq ft at HP3+4 in Stoke Gifford.
James Preece said: “Last year was another solid year for the Bristol Office market, with close to one million sq ft of take up.
“When you consider that the last five years had seen three record years where over 1 million sq ft was taken up, the market has remained very strong in the face of economic uncertainty. Moreover prime city centre rents grew by 7 per cent during the last 12 months, underlining this strength.”
Mr. Preece said there were no city centre deals of over 20,000 sq ft in the final quarter, with a subdued level of 97,000 sq ft being taken up. Grade A rents remain at £35 per sq ft, which was achieved at Aurora in Finzel’s Reach in Q3.
Out of town, take up reached 113,000 sq ft in Q4, broadly similar to Q3. The end of last year saw the Ministry of Defence signing up to 32,000 sq ft at the newly refurbished 800 Aztec West, with Grade A rents rising to £22.50 per sq ft.
“After a very poor start, the out of town market bounced back to surpass the five-year average by almost 20 per cent,” says James Preece.
“However with a lack of new development in 2019, it will be the refurbishment of buildings that is likely to satisfy much of the demand.”