Activity in the Bristol office market picked up during Q2, compensating for a slower than expected start to the year, with smaller deals making up the numbers.
According to the latest Bristol Offices Snapshot from Colliers International, although overall first half take-up remains almost 25 per cent down on the same period last year, quoting rents are on the rise and are anticipated to pass the £30 per sq ft milestone later this year.
National offices specialist James Preece (pictured) explained that increased letting activity in the city centre, along with falling supply, is fuelling the rental growth, particularly in the Grade B market.
The number of city centre deals rose by an impressive 31 per cent, with over a third being in the 5,000 to 10,000 sq ft range.
“There were 38 transactions over 1,000 sq ft but no deals above the 12,764 sq ft of Grade B space let to Desklodge at 1 Temple Way,” said Preece.
Overall, Q2 take-up was 51 per cent up on Q1 at just under 160,000 sq ft, taking the half year take-up to 266,000 sq ft – a 10 per cent fall on 2014.
Grade A rents are currently around the £28.50 per sq ft mark, while top Grade B rents are quoting £18.50 – £24 per sq ft, and lower Grade B rents have increased to £13 -£17 per sq ft.
In contrast out-of-town take-up was marginally down on the first quarter, but quoting rents remained stable at £20 -£22 per sq ft for Grade A space and £14-£17 per sq ft for Grade B space.
“It is encouraging to see take-up improving in the city centre this quarter. We are continuing to see good demand both in and out-of-town,” Preece continued.
“With limited supply, particularly in the city centre, quoting rents are still rising and we anticipate rents to cross the important £30.00 per sq ft barrier this year.”
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