Office deals in the South West plummeted in the second quarter of the year as the UK went into lockdown.
Latest figures on the region’s office market from commercial real estate company CBRE show transaction volumes totalled £114million - 25 per cent of average annual volumes of £450million.
According to CBRE, the forward funding of Bristol’s Halo development - a green office that will be part of the city's Finzels Reach development - by Tesco Pension Investment in June accounted for a "significant portion" of transaction volumes for the half year.
The in-house asset manager for the supermarket's pension scheme is ploughing £70million into the Grade A office building.
Prime rents in Bristol city centre currently stand at £36.50 per sq ft following the letting to law firm Osborne Clarke at Halo, while the out-of-town market remain stable at £23 per sq ft, CBRE said.
“Given that much of the second quarter of the year was spent in lockdown, it wasn’t surprising to see a marked drop in activity for the region’s office sector compared to what we would have anticipated prior to the coronavirus outbreak,” said Andrew Sayner, head of capital markets at CBRE South West.
“However, we’re witnessing signs that activity and confidence is being restored in the market, with new sales launched and deals going under offer.
"As restrictions continue to be relieved, we expect to see a continued but steady increase in market activity in Q3 and Q4 as investors return to the market.”
