The office market in Bristol is “well placed” to weather the storm caused by the coronavirus pandemic, according to a new report.
The start of the year saw office take up 52 per cent above the quarterly average - its highest for 10 years - the Big Nine report by real estate company Avison Young found.
Take up was dominated by the professional and financial services sectors, accounting for the top five deals in the city centre.
One of the largest deals within the UK’s ‘Big Nine’ markets was law firm Osborne Clarke taking 74,000 sq ft pre-let space at Halo at Finzels Reach.
Meanwhile, the largest standing stock transaction was at One Temple Quay, where Sanlam Life & Pensions took 20,365 sq ft.
Total take up in the city centre amounted to 219,420 sq ft in the first quarter, with four further deals greater than 10,000 sq ft, including to engineering company WSP and lawyers Ashfords.
Deals in the first quarter have moved headline rents to £35.50 per square foot (psf), and asking rents to £37.50 psf.
“Take-up figures reflect the healthy situation of the Bristol office market before the Covid-19 crisis,” said Paul Williams, director at Avison Young.
“The strong fundamentals in the market will likely provide an element of resilience during the current pandemic meaning it is well placed to recover when the lockdown is lifted, assuming a return to some form of normality over the next few weeks.
“Vacancy rates are low and 65 per cent of the current stock under construction is pre-let. Occupiers are still trying to progress requirements that are well established, and there are some sizeable requirements in the market.”
'We remain positive about prospects for the Bristol office market'
The three speculative buildings under construction or about to start in the city total 237,000 sq ft, according to the report.
In addition to office building Halo, these include the Distillery at Glassfields where 93,000 sq ft is available, and also 1 Portwall Square, where developers Nord have cleared the site, and are expected to start construction shortly.
Meanwhile, venture capital firm Melburg and investment firm Angelo Gordon have received planning consent for their proposed refurbishment of the 110,000 sq ft South Plaza, which will be rebranded to 360 Bristol.
The office will have facilities including a gym, cycling facilities, yoga studios, a café and a business lounge.
Paul added: “Activity is expected to be significantly down over the next months. The lockdown is not only creating uncertainty around pricing and occupational requirements but significant practical difficulties.
“Viewings and due diligence cannot be carried out and material for construction sites and fit outs will be delayed.
“However, several deals are progressing regardless, while others are taking a ‘wait and see’ approach, and we remain positive about prospects for the Bristol office market to recover.”
