New kids on the (office) block

Only months ago voices were clamouring that Bristol was running out of office space.

Historically low commercial rents combined with pressing need for housing stock was met with a relaxation of planning restrictions for change of use from office to residential, and tower after tower was turned over to flats and student accommodation. Some estimates suggest that up to 1 million square feet migrated from commercial to residential.

But as the economic recovery has made progress, demand for office space has returned. First quarter take-up in 2016 was the highest recorded in Bristol’s office market for a decade.

“Demand for office space in Bristol is at an all-time high,” says James Preece, national offices director in the Bristol office of Colliers International. “By the end of Q3 2016 there had been a record level of take-up in the city centre of 515,000 sq ft – which exceed that for the whole of 2015. Levels of demand are particularly high in the city centre, which Q3 figures show was 24 per cent up on the five-year average.”

That, combined with the pressure on stock, has sent rents creeping upwards.

If there’s a bottleneck, it’s about to be eased with the announcement of a number of glittering new towers set to come online in the coming year.

Beyond the showcase developments of Wapping Wharf, where 220,000 sq ft of BREEAM-rated ‘excellent’ (the sliding scale of sustainability for commercial real estate) office space is planned, and Redcliff Quarter, which promises another 15,000 sq ft, glass-clad megaliths will be rising from the dust across the city.

Under construction by Wilmott Dixon, the Aurora building, part of the Finzel’s Reach development, is due to open its doors for business in autumn 2017. It will offer 95,000 sq ft of BREEAM-rated ‘outstanding’ office space right on the Floating Harbour, overlooking Castle Park. It is proudly the only scheme in the city to ‘meet or exceed’ the British Council for Office design’s criteria for maximising daylight throughout the building.

Further towards Temple Meads on Victoria Street, the Aspire block – BREEAM ‘excellent’ – has the largest floorplate of any new building in the city and so will bring a gargantuan 200,000 sq ft of work housing over eight floors. It will front a new public plaza, Temple Square, which forms part of the Council’s Temple Quarter Enterprise Zone.

Determined to foster creativity, designs include an ‘incubator room’ where colleagues will be encouraged (or maybe forced) to collaborate over coffee in a range of bars, cafes and restaurants.

Over the road, One Redcliff Street is undergoing a £15 million facelift to keep up with the Joneses at Bull Wharf which was extensively refurbished in 2012 and One Victoria Street, refreshed in 2013. In fact, refurbishments are keeping pace with new builds. St Augustine’s Courtyard came back online recently offering nearly 32,000 sq ft of Grade A office space behind the Hippodrome. 

Meanwhile, behind the train station, outlining planning permission has already been granted for The Anvil, a 7-storey, 83,000 sq ft block with verdant roof terraces and panoramic city views. Linkcity, the developers behind the project, have form in the city, having worked on the Paragon and Aardman Animation Studios under their former trading name of Bouygues UK.

Planning has been filed for a 1.5acre development called ‘Assembly’, a mixed used development on Temple Way that promises “up to 300,000 sq ft” of space, though it’s not yet clear how much of that will be assigned for offices.

Out of town, a £100 million office scheme is planned for Parkway, aiming for completion in 2018. Sitting on the Metro Bus route and on the main train line between Swansea and London, The Approach will bring 200,000 sq ft of office space online.

The impact on rents? Sadly, still upwards. Head of the Bristol office of commercial property specialist Colliers International, Tim Davies, predicts that premium office space could breach £30 per sq ft. “The property fundamentals of the commercial market remain strong and therefore in terms of gaps (or lack of supply) and opportunities (namely demand that needs to be satisfied), developers and landlords who are prepared to speculate will surely reap dividends.”

“In terms of Grade A new build there is still a shortage of stock, with only one speculative office building under construction in Bristol,” says James. “A number of refurbishments coming onto the market in 2017 which will increase office supply in Bristol, however, this will be within the context of an historic low level of supply, so even with this new space supply levels will still be low.”

It’s good news for landlords and heavyweight companies, but SMEs looking for mid-range space? They’ll have to be creative.

Read more:  9 of Bristol’s coolest offices