Bristol’s office market sees highest demand in five years

The market for office space in Bristol saw its highest level of demand in five years in 2022, according to the Bristol Office Agents Society.

In quarter four, the out-of-town market saw its highest periodical take up since 2018, indicating a renewal of activity as the country recovers from the Covid-19 pandemic. It was a more subdued period for the city centre market, however, which may have been caused by stronger periods earlier in the year.

The final quarter saw 29 deals completed at an average size of 3,832 square feet in the city centre, with a total take up of 111,130 square feet. This means the area saw a total take up of 620,211 square feet across 2022 – its strongest since the pandemic and in front of both half and full decade averages.

EPIC’s expansion into a further 13,141 square feet was the only deal in the period above 10,000 square feet in the city centre, with an increase in deals between 4,000 and 10,000 square feet contributing to the greater overall figure.

Across the year, headline rents in the city centre rose 11 per cent, remaining the highest among the six biggest cities at £42.50 per square foot. Incentives have also remained low, and these trends are expected to continue as tenants continue to seek and pay for high-quality space.

Despite several developments on track for completion in 2023, the number of new developments that began in 2022 was less than in 2021, leading to a tight supply. Two major developments, led by Candour and Tristan Capital, are currently under construction at the Welcome Building on Avon Street.

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Other sites have secured planning, but have yet to begin construction. However, there have been several comprehensive refurbishments that have recently begun, including V7's One Hundred Victoria Street and L&G's North Quay House, which will bring about 85,000 square feet of grade A space to the market in 2023.

The Bristol out-of-town market saw its strongest quarter in terms of take-up since 2018, with 109,191 square feet leased, also bringing the annual total, at 340,158 square feet to its highest point since the same year.

The fourth quarter saw 22 deals completed, the most active quarter of 2022, with an average deal size of 4,963 square feet. Babcock's subletting of 39,694 square feet at 100 Bristol Business Park to a confidential sub-tenant was the largest of these leases.

Simon Price, Partner at Alder King commented “2022 saw another very strong year of take-up in the Bristol office market boosted by the city’s attraction to a diverse range of occupier sectors. With ESG credentials and building amenities now at the forefront of many occupiers’ search criteria the very high quality of the new developments and refurbishments already underway in the city bode well for another strong year in 2023 in terms of take-up and further rental growth.”.

Avison Young’s Office Agency Director Paul Williams added; “As the office market continues to emerge from the effects of national lockdowns and react to new ways of working, the take up figures demonstrate just how resilient the office sector is with developers and landlords delivering the high-quality accommodation and range of amenities which occupiers are now seeking.

“It is particularly encouraging to see the recovery in the out-of-town market which has been slower to pick up but is now also performing strongly, and the figures overall give every reason to be optimistic about the prospects for the coming year.”

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