Bristol's office market is showing an improvement on 2020 following demand from public sector organisations, a new report has found.
Take up of office space in the city centre reached around 220,000 sq ft in the first half of the year, while the out-of-town market reached 95,000 sq ft, according to the latest 'Bristol Snapshot' from real estate firm Colliers.
The Passport Office is currently seeking 100,000 sq ft in Bristol, while the BBC is taking 60,251 sq ft at Bridgewater House on Counterslip.
The research showed that in the second quarter, the city centre doubled the levels seen year-on-year, reaching 103,498 sq ft.
Twenty deals were recorded in total over the period, compared to nine at the same time last year. Take up was driven by the smaller workspaces, according to Colliers, with 80% of city centre deals being below 3,000 sq ft.
"There has been a real commitment from big public sector bodies, driving their proportion of take up to 58%," said James Preece, National Offices director at Colliers Bristol.
“We certainly saw an uptick in demand in the second quarter, however this has yet to translate in to the take up figures."
Vacancy in the city centre rose slightly to 7.2%t due to the completion of 91,673 sq ft at Royal London’s Distillery Scheme, while headline rents remained at £37.50 per sq ft.
The out-of-town market recorded 33,259 sq ft of take up in the second quarter and despite a lack of larger transactions of over 6,000 sq ft, three times as much space transacted during the period compared to the same time last year. Prime rents remain at £22.50-£23.50 per sq ft.
Mr Preece said: “There was a real uptick in medical-related requirements this quarter and we expect this to feed through into the figures as we go through the year.
"Looking back on the first half of the year there haven’t been many large deals in the out-of-town market. However, the average deal size in the first half of the year was 4,739 sq ft, compared to just 3,070 sq ft in the second half of 2020, showing things are moving in the right direction.”
Office investment into Bristol reached £27m in the second quarter of the year - down on the first-quarter volume of £85m, which was boosted by the £75m sale of Temple Quay House.
Major deals included the purchase of St James Court by the NHS for £12.4m, Wyndham Court by Ƶ Research Office ƵRO for £6m, and Lewis Investment’s purchase of Charlotte Place for £5m.
Carys Allen, in the National Capital Markets team at Colliers Bristol, added: “As the investment volumes show, market conditions have been challenging so far this year, with a lack of new opportunities being brought to the market.
"However, demand for prime assets is reasonably strong with a number of active investor requirements for city centre offices.
"We anticipate momentum will build during Q3 and Q4 of this year as we adjust to the easing of Covid restrictions and we see a greater number of people returning to the office.”
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