In and out-of-town markets perform well in Q3 – with larger transactions completing
Bristol’s office market is continuing to defy ongoing economic uncertainty with both the in and out-of-town sectors performing well, according to commercial property specialist Colliers International.
The firm says “a solid third quarter” of 2018 saw overall take-up surpassing 280,000 sq ft and the completion of a greater number of large office deals in excess of 10,000 sq ft. The largest of these was Parmenion Capital’s acquisition of 31,200 sq ft at Cubex’s recently-completed Aurora development.
Availability increased this quarter but since its peak in 2011, vacant space in the city centre has fallen by two-thirds and is almost 50 per cent below the ten-year average of 1.5 million sq ft.
Bristol’s out-of-town office market also performed well in Q3, recording a total take-up of 116,629 sq ft. Two-thirds of transactions were in excess of 10,000 sq ft, the largest being Edvance’s acquisition of 30,700 sq ft at the newly refurbished 800 Aztec West, which also witnessed Q3’s highest rent (£21.50 sq ft).
Overall availability in the out-of-town market decreased by 17 per cent quarter-on-quarter, with total vacant space now standing at 472,065 sq ft.
Meanwhile total investment volumes in Bristol for Q3 2018 totalled a huge £205.95 million in just eight deals.
Richard Coombs, Director at Colliers International’s Capital Markets team, said: “This represents a 220 per cent increase on the five-year average for the same period, a 350 per cent increase on the previous quarter and around half of the total amount transacted in the whole of last year.
“This meant an increase in average deal sizes from £9.6 million in Q3 2017 to £26.1 million 12 months later.”
James Preece, Director at Colliers International’s National Offices team, said: “The Bristol office market remains very robust, with a number of larger transactions completing this quarter.
“Following a similar pattern to 2017, the city centre figure was 167,000 sq ft – the largest quarterly take-up for the year to date, and ahead of the five-year average.
“The lack of supply and flight to quality office space in the city centre has seen prime rents reach £35 per sq ft and following a poor first quarter, out-of-town take-up has bounced back to be 20 per cent above the five-year average.
“However overall supply in both the city centre and out-of-town markets continues to be constrained. The completion of Aurora, Finzels Reach in Q3 delivered 95,000 sq ft of new Grade A office space, but this was the only new addition to the market.”