Bristol snapshot - July 2013

Market Highlights

• Bristol net stock absorption continued to show a positive trend going into 2013. Absorption rose by 136,624 sq ft in H1 2013 across the whole Bristol market which is the highest half-yearly total for over five years. City Core occupation levels are now just 1% below the last peak recorded in December 2010. Grade A absorption remained positive for the third consecutive half year period. (see Figure 2).
   
• There has been a noticeable improvement in take up of offices in the first half of 2013, with an overall City centre total of 289,486 sq ft transacted. This is 55% up on the same period of 2012, largely due to two large city centre deals. The majority of leasehold transactions remain in the smaller size ranges, but the number of requirements in excess of 10,000 sq ft has increased over the second quarter.
   
• Overall vacancy in the City core is at its lowest level for two years, with availability in Clifton at a similar low. Grade A availability continues to see modest reductions (see Figure 1) but there remains over 300,000 sq ft of Grade A product in the City core and this equates to a vacancy rate of 14.7% which is the lowest since June 2007. Speculative development looks set to increase in the core to add to Prupim/Cubex’s One Victoria Street (47,000 sq ft) due to complete in Q4 2013. Salmon Harvester is set to commence construction at its 98,522 sq ft Two Glass Wharf scheme and Skanska is already on site at 66 Queen Square (61,000 sq ft) due to complete in Q1 2015. The delivery of these schemes is set to provide product that will justify headline rental uplift.
   
• Grade A rents remain stable at £27-£28 per sq ft, which is good news for the speculative pipeline schemes. Incentives are still the main negotiating point in most transactions with an average of three months per year of the term certain being granted.