Strong demand but shortage of quality city centre offices will push up rents to new high, say agents

April 12, 2024

Office rents in Bristol city centre are set to soar by more than 17% to a record high this year due to a shortage of prime space.

Property agents in the city believe an increase to £50 per sq ft is “very realistic” as a growing number of firms chase a dwindling supply of grade A offices. 

The top rent paid last year was £42.50 per sq ft, with a deal for £46 per sq ft recently completed on an undisclosed property.

Commercial agents have been cheered by a marked turnaround in the market during the opening three months of this year, when 20 deals were concluded totalling 126,979 sq ft – a 54% improvement on the same period last year and only just below the five-year average for a first quarter.

Latest research by the Bristol Office Agents Society shows three deals in excess of 10,000 sq ft in the city centre during the period.

The largest was national law firm DAC Beachcroft’s commitment to relocate its Bristol office from Portwall Place to Tristan Capital Partners and Trammell Crow’s new Welcome Building (formerly 4 Glass Wharf), pictured, at Temple Quarter.

DAC is taking 44,196 sq ft on the sixth and seventh floors of the 212,000 sq ft building, which is nearing completion.

This was followed by the NHS’s move to 30,161 sq ft at Bristol City Council’s 100 Temple Street and engineering consultancy Frazer Nash’s expansion into a further 13,831 sq ft at Narrow Quay House, pictured

The Bristol Office Agents Society warned at the beginning of this year that the city centre would suffer from an acute shortage of top-end office space over the next 12-18 months due to a lack of major development.

Now it has pointed out that the first three months of this year marked another period in which no new office developments started in Bristol.

Construction of the Welcome Building and CEG’s 200,000 sq ft EQ on Victoria Street, pictured, will complete within the next six months. 

And while there are also several comprehensive refurbishments underway – including APAM’s One Friary, Credit Suisse’s 3 Rivergate and CEG’s Crescent, which will provide space over the next 12 to 18 months - looking further ahead the development pipeline was “thin”, the agents said.

Schemes that started now would take at least 24 months to be developed, they added.

Cushman & Wakefield associate partner Alfie Passingham said: “The success of EQ to date, and the recent pre-let at Welcome Building, is proof of the persistent demand for buildings amenitised with a combination of food and drink, outdoor space, gym facilities and best-in-class accreditations. £50 per sq ft is very realistic for prime rents later this year.”

Hartnell Taylor Cook partner Chris Grazier added: “Despite tough economic conditions, Bristol has demonstrated its resilience with the first quarter witnessing the return of large-scale occupier activity to the market further reducing the supply of high-quality new and refurbished space.

“This underlines the need for landlords to deliver further development over the coming months to capitalise on the positive occupier sentiment.”

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