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30th March 2020
Huge growth is predicted for Bristol construction as the city becomes one of the most vibrant regional commercial and industrial development markets outside of the South East.
When business life returns to normal, the construction pipeline in the city is likely to benefit as major employers view locations away from London more favourably – removing the need for long-distance staff commuting.
A recent report from Savills noted that 2019 was an extremely strong year for Bristol’s office market. It was crowned in the fourth quarter by the city’s largest-ever office letting, when BT signed up to take all the space in the landmark 200,000 sq ft Assembly building, which is currently under construction (Glenigan Project ID: 07380002).
Boosted by strong demand from the South West’s tech, media & telecoms, financial services and serviced office sectors together with a limited supply of space, record rents of £37.40 per sq ft have recently been recorded for refurbished Grade A office space in Bristol.
Highest top rents
Today, Savills says Bristol has the highest top rent among the big six regional office markets and it is forecasting further increases in rents to £40 per sq ft.
Meanwhile, supply of office space is limited to just 540,000 sq ft (of which 120,000 sq ft is Grade A). Apart from the soon-to-be-completed scheme of 90,000 sq ft at The Distillery (Glenigan Project ID: 16416056), there are no further completions due until 2022. Significant interest in space from occupiers means opportunities are diminishing quickly.
All of this bodes well for construction activity around the city and as developers seek to meet buoyant demand for new commercial space, a variety of significant projects are in the pipeline.
As well as a new indoor sports arena and convention centre, the £100 million Ashton Gate Stadium redevelopment in Bristol is set to include offices, two hotels, a multi-storey car park and housing. Work on the scheme, which is at the pre-tender stage, is set to start in spring 2021 and continue for 12 months (Glenigan Project ID: 18327993).
Meanwhile, construction work on an £87.5 million scheme of offices and academic units for the University of Bristol on a former Post Office site on Cattle Market Road is set to get underway this autumn and continue for 24 months. The project is at the pre-tender stage (Glenigan Project ID: 20091224).
Although it is still at an early stage, the huge £200 million Bristol Temple Meads Development is set to include around 10,000 sq m of ‘employment land’, which is likely to be offices. Work on the Bristol City Council project is likely to last four years and will also include some 1,300 flats (Glenigan Project ID: 18260667).
Fit-out and refurb opportunities
Bristol saw more serviced office deals than any other major UK regional office centre last year. The continuing strong demand is likely to mean growing opportunities for fit-out and refurbishment contractors as premises are converted to meet the needs of the sector.
Some significant industrial construction projects are also in the pipeline around Bristol. Detailed plans have been approved and contracts awarded on Trebor Developments’ £21.9 million Western Approach Distribution industrial/warehouse scheme at Severn Beach near the city. Work is due to start in the autumn and continue for nine months (Glenigan Project ID: 09093941).
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