23 May 2012
Bristol office market “to repeat 2011 performance”
The office market in Bristol looks set to remain challenging for the remainder of 2012 according to BNP Paribas Real Estate.
The leading international property adviser’s Bristol Market Report for Spring 2012, reveals that the annual take-up of offices this year will be at a similar level to 2011 due to a lack of large corporate requirements in the market. At the same time office rents in both the city centre and out of town markets are expected to remain under pressure at £27.50 per sq ft and £19.50 per sq ft respectively.
BNP Paribas Real Estate’s Peter White says: “Despite the lack of large requirements there will be a continuing reduction in the availability of prime accommodation, which could result in developers and landowners, who are currently considering refurbishing existing properties or speculative developments, to commence onsite in the latter part of the year.
“Notwithstanding a low volume of large transactions take-up of offices in Bristol fared reasonably well in Q1 with 91,505 sq ft being let or sold in the city centre and a further 104,205 sq ft in the out of town locations, making it the best performing quarter for this sector since Q2 2010.
“The letting of 40,760 sq ft BNS Nuclear Services at The Quadrant, Aztec West was particularly noteworthy,” he added.
In parallel with the occupational market the volume of investment transactions is also expected to be well down on the 2011 level mainly due to the lack of quality stock available for investors to buy.
In the first quarter of the year just £11m was invested in Bristol offices, compared to £105m twelve months previously. BNP Paribas Real Estate anticipated this slump in investment transactions following 2011, which saw office investment total £265m – a 150% increase on the 2010 level. Over the past six months investors have increasingly turned their attention to the out of town locations.
Bristol Business Park in particular attracted investor interest, with three separate units sold over the last two quarters. F&C UK Property Fund paid £7.05m for buildings 410 and 420, whilst Mayfair Capital PUT paid £5.5m for building 440.
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