The office market in Bristol is poised for “a strong finish to the year” following a rise in demand for flexible workspace in the city centre in the third quarter of the year, according to a new report.
Real estate company Avison Young’s latest report across the ‘Big Nine’ 海角视频 office markets found that occupier confidence had reached its highest level nationally since the start of the pandemic, reflected in the strongest take-up for two years.
The largest deal of the quarter in Bristol was in the out-of-town market, which saw public body the Nuclear Decommissioning Authority letting 26,800 sq ft at Keypoint in Almondsbury Business Park.
The two largest letting deals in the city centre both involved flexible workspace with office providers Runway East and DeskLodge respectively taking 15,000 sq ft at 101 Victoria Street and 11,800 sf ft at One Castle Park.
Avison Young director Paul Williams said activity in the sector in Bristol and other cities was picking up with a “post-Covid focus on flexibility” underpinning the rise in demand.
Total take-up in city centre and out-of-town markets for the year to the third quarter was almost 480,000 sq - someway short of the 10-year average of 620,000 sq ft for the same period.
Avison Young said it was expected this to be boosted by “a number of large deals” including at least two over 50,000 sq ft due to take place in quarter four.
The report found that buildings under construction had been receiving “keen interest”, including developer CEG’s 84,000 sq ft EQ office project on Victoria Street, and an additional 120,000 sq ft at Assembly Bristol development, both of which will be completed 2023.
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Office space at 1 Portwall Square and Halo at Finzels Reach are both due to complete later this year.
City centre headline rents remained at £38.50 per square foot in the third quarter, though this is up from £35.50 at the start of the year. The report predicted further rental growth by the end of the year, with at least one significant letting close to agreement in excess of £40 per square foot.
The vacancy rate for Bristol city centre increased from a cyclical low of 3.1% pre-pandemic to 6% this quarter, though remained low in historic terms compared to to a cyclical high of 12% in 2012.
Richard Howell, principal at Avison Young in Bristol, said: “There continues to be a considerable weight of money looking to invest in the regional office market, and Q4 is expected to be the strongest quarter of the year, particularly given the slow start to 2021.”
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