Property adviser Avison Young heralds most active year since 2017 for Bristol offices

The Bristol office market has enjoyed its busiest year since 2017 as it continues to bounce back from the pandemic, according to strategic real estate adviser Avison Young.

The firm has released its latest Big Nine office market update for the final quarter of 2022, which looks at trends in Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, Manchester, and Newcastle.

The quarterly analysis of the UK’s regional office markets shows that Q4 was the second busiest of the year in Bristol with take-up seeing a particular uplift in the out-of-town market, and city centre demand increasingly focused on best-in-class space.

The out-of-town market saw take-up 39 per cent above the 10 year-average, with the city centre also doing well at 28 per cent above average levels, following an exceptionally strong start to the year.

This brought total take-up in 2022 to 960,369 sq ft, making 2022 Bristol’s most active year since 2017.

“The Bristol office market rebounded in 2022 following two years of Covid lockdowns, achieving a total take-up of 960,369 sq ft for the city centre and out-of-town markets, a 27 per cent increase on the previous year, and the highest annual total since 2017,” said Paul Williams, director of offices at Avison Young in Bristol.

Key deals of the quarter included Boeing’s lease at Bristol Business Park, EPIC’s lease at Hartwell House, and Nordic Semiconductor’s pre-let on a floor at Assembly C.

Bristol take-up contributed to a total of 2.5m sq ft transacted nationally in the final quarter of the year, 14 per cent higher than the 10-year average. This brought annual take-up to 8.1m sq ft, 41 per cent more than in 2020 but one per cent below 2021 levels.

In Bristol, 2022 was the most active year for development completions since records began in 2000, including new developments such as Halo and One Portwall Square and the refurbishment of 360 Bristol.

2023 is set to deliver two-thirds of last year’s completions, including the refurbished and extended 100 Victoria Street, and new developments at EQ, Assembly B & C, together with Cargo Work which has just completed. Across all schemes under construction, 18% of space is currently pre-let.

During Q4 2022 availability fell to 5.1 per cent, lower than most Big Nine cities and the first quarter of tightening supply since Q1 2022.

Helping to relieve supply in future, further schemes under construction or in the pipeline include The Welcome Building at 4 Glass Wharf, and refurbishments at The Crescent, Blok, The Fairfax and Quay.

“Office demand is increasingly focused on best-in-class space, due to a desire to meet CSR targets surrounding sustainability, to attract and retain the best talent and encourage the return to office, and to occupy real estate that aligns with a company’s brand and aspirations," said Paul.

“This has supported an increase in prime Grade A rents to £42.50 per sq ft in Bristol city centre, whilst out-of-town rents have remained steady at £23.50 per sq ft.

“Although some sectors have seen a decrease in office footprint due to a shift to hybrid and home-working, within Bristol this has been offset by other sectors which are on a growth trajectory, in particular in the creative, media and technology field, which has underpinned the resilience of the city centre office market, coupled with the growth of the flex-sector.

“With a number of significant development schemes and refurbishment projects due to complete in 2023/24, market sentiment is positive and the outlook bright notwithstanding the headwinds in the wider economy.”