Research Report – Invest In Bristol, March 2013
Commercial property market
Occupier market performance
Bristol’s occupier market is still facing the challenges associated
with the economic downturn. Following the financial crisis
in 2007/2008, average rental values across all sectors have
remained in decline. Although 2012 saw an increase in this rate
across all sectors compared with 2011, rental performance
should improve this year.
We forecast that average office rents will increase by 0.6% this year.
The retail sector (high street retail only) is forecast to experience the
greatest decline in rental values (-2.3% pa). The industrial sector will
see a slower rate of decline of -0.5%.
In the five years to 2017, offices are expected to see the greatest
growth in rental values, reaching 3.5% pa by 2017. The retail sector
will be the slowest of the sectors to see a recovery in rental growth,
with positive growth not expected before 2015.
Output trends and outlook
Over the next five years, the sectors forecast to show the greatest
cumulative growth in Bristol are finance and insurance services
and construction, both of which are set to outperform the UK.
Significant growth is also expected in the professional and other
private services, and information and communication services,
over the next five years, at 15% and 14% respectively.
Public services are expected to have the lowest cumulative
growth rate over the five year period at 4%. So overall, there will
be a rebalancing of the economy away from the public sector
towards the professional services and information sectors. In the
short term, output in Bristol is expected to grow by 12% up to 2017,
exceeding the UK’s growth rate of 10% over the same period.