City centre office market bounces back as creative and tech firms engage in race for prime space

February 3, 2023

Bristol’s buoyant tech and creative sectors are helping the city’s office market recover from the impact of the pandemic – with headline rents ahead of other major regional cities, including Birmingham and Manchester, according to new research.

The tech, media and telecoms sector, along with professional services and co-working space operators between them accounted for more than half total take-up of office space last year. 

At the same time there was also a ‘flight to quality’ with the city centre’s new flagship developments EQ on Victoria Street, Assembly on Temple Way, pictured, Halo at Finzels Reach and 1 Portwall Square on Redcliffe Way all securing lettings before being completed.

The lack of top quality space is also likely to lead to a new record rent in the city centre following an 11% increase last year – making Bristol the most expensive of the ‘Big Six’ regional cities.

Currently at £42.50 per sq ft, property agents in the city say they are aware of at least one deal under offer in higher than this which is expected to exchange in the next six months.

Total office space take-up last year was 620,000 sq ft – the highest since 2017, higher than the five and 10-year average and 70,000-plus sq ft more than the three-year average, according to latest figures from the city’s property agents.

With supply at low levels of just 3%, sentiment remains strong in the city centre despite a quiet fourth quarter and a relatively slow start to 2023 so far, CSquared partner Andy Heath said.

“We anticipate continued growth in the media and tech sectors throughout the first half of the year and further growth in Grade A headline rents with completion of long-awaited schemes including EQ and Assembly,” he added.

“There is a strong development pipeline in Bristol city centre which we anticipate will be absorbed by existing occupiers seeking better quality space as they start to stabilise after an unsteady 24 months.”

Alder King partner Simon Price added: “Top-end lettings on prime new city centre space have taken Bristol headline rents ahead of other major regional cities, including Birmingham and Manchester, and currently stand at £42.50 per sq ft with further growth likely during the first half of this year.

“Occupier focus is now firmly on ESG (environmental, social and governance) credentials, wellness and building amenity with increasing headline rents often being driven by a reduction in size but increase in quality.” 

Key city centre deals included fast-growing fintech firm Paymentsense taking 54,767 sq ft at CEG’s 200,000 sq ft EQ scheme, where Mayor of Bristol Marvin Rees recently took part in a steelwork-signing ceremony, pictured above, and accountancy group Deloitte’s pre-let of 22,500 sq ft at Cubex’s sustainable building Halo, pictured.

EQ, which will feature a rooftop bar, restaurant and business lounge with communal terrace and 50 seat auditorium, as well as a fitness suite, is on target to complete in the next couple of months with 40% of the building pre-let and a further 10% under offer.

Meanwhile, AXA/Bell Hammer’s Assembly Buildings B & C are expected to complete later this year – around the same time as Candour and Tristan Capital’s 207,000 sq ft Welcome Building at Temple Quay.

While the city centre office market has a strong pipeline of just over 750,000 sq ft, just over 15% of it is pre-let.

This year has got off to a strong start with Norwegian chip design firm Nordic Semiconductor becoming the latest occupier at Assembly, where it is taking 7,800 sq ft across the entire ninth floor of Building C, and just over 6,500 sq ft in recently refurbished 10 Victoria Street let to insurance services provider Allianz and investment managers Schroders.

Nordic joins BT in Assembly, which has starting moving into 201,000 sq ft in Building A, and national law firm Clarke Willmott, which has taken the top two floors in Building C and will relocate its head office from Finzels Reach in spring. 

Four of the six floors of developer Nord’s 33,750 sq ft 1 Portwall Square, next to Bristol City Council’s 100 Temple Street office, have been pre-let, with its architects Allford Hall Monaghan Morris (AHMM) relocating its Bristol base to two floors in the building.


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