Two speculative projects are underway in Bristol after five years of zero-growth in the commercial market.
Work has now started at 2 Glass Wharf on a joint development for Salmon Harvester and NFU Mutual. The Swedish-based Skanska group also has an office project in progress at the city’s Queen Square. The decision by both developers to start building big offices on-spec, which many still see as a gamble, shows an underlying faith in the recovery and growing confidence in the market.
“With cranes on site at two developments, and more commercial office space being converted into residential properties, 2013 will be seen as a turning point in Bristol and a major step in the right direction for occupier levels and inward investment in 2014,” commented Jeremy Richards, head of the Bristol office of Jones Lang LaSalle.
Due for completion in May, 2014, and May, 2015, respectively both projects are seen as key indicators for several other moth-balled developments. Most insiders expect the schemes to succeed.
Both developments have signed Alder King as one of the agents. Agency boss Simon King says the schemes are a ‘vote of confidence’ in Bristol.
“Both developers undertaking these schemes looked at various locations outside London and they selected Bristol because they have seen an upturn in the market and the prospect for growth. It is a big test for the market.
“News of the improving market has come at a very good time for speculative developers, giving them many reasons for optimism going into 2014,” he added.
Recent CBRE figures show the graph is on a steady incline with third quarter office take-up at 138,187sq ft. City centre deals through the summer months included Barclays taking 18,759sq ft at Bridgewater House and Semperian relocating from London to take 10,084sq ft in Broad Quay House. In a consolidating move for many of its smaller departments, Bristol City Council also acquired offices at 100 Temple Street.
Total take-up of Bristol city centre office space for the first three quarters this year is 427,673sq ft, compared to 409,225sq ft for the same 2012 period.
There is also a significant rise in “crossover projects” following the introduction of permitted-development rights, which allow old offices to be turned into flats. Already in the approval stage is a scheme to convert Bristol’s art deco Electricity House into luxury apartments.
“We can see that with a rise in the number of offices becoming outdated and at risk of falling into disuse, coupled with changes to traditional retail, there will be more opportunities for space to be converted into residential developments throughout 2014,” said Richards.
“Sites such as Wapping Wharf and the redevelopment of Bristol General Hospital will also help kick-start wider regeneration in Bristol.”
One benefit of any renewed wave of commercial conversions to residential blocks will be to clear out the older and often neglected office stock, allowing room for more new offices.
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