Bristol office rents grow at fastest rate of any UK regional city

Bristol office rents grow at fastest rate of any UK regional city

Bristol’s office market recorded 12% rental growth over 2022, according to leading global property adviser Knight Frank, the strongest growth rate of any UK city outside of London.

Knight Frank’s 2023 UK Cities report, which compares the office market performance of the UK’s regional cities, revealed that office rents in Bristol reached £42.50 per sq ft as of the end of 2022, up from £38.00 one year before.

The city recorded a 15% increase in office take-up versus 2021 to over 620,000 sq ft, with Grade A supply down 83% year-on-year due to significant pre-let activity as occupiers make the flight to high-quality new space. As a consequence, available space at the end of 2022 was just 5.8% of total stock, close to an all-time low.

2022 saw the completions of several high value lettings in Bristol, with Clarke Willmott, Deloitte and Payment Sense all taking new space. Several high-quality new developments in Bristol’s CBD will be completed this year, including the BREEAM Outstanding 100 Victoria Street, Candour Group’s all-electric Welcome Building and the next phase of Royal London’s Glassfields. However, with only 590,000 sq ft of speculative space currently under construction but 1,500,000 sq ft of lease expiries expected between 2023-2025, the Bristol office market is set to continue to experience an acute undersupply of high-quality space in the years ahead. Knight Frank anticipates that rents will continue to rise as a result, forecasting growth to £44.00 per sq ft over the next year.

In line with nationwide trends accelerated by the pandemic, occupiers in Bristol are increasingly focused on leasing space which provides more than just office space; best-in-class amenity provision, green space and areas for collaboration are attracting blue-chip occupiers focused on bolstering productivity and employee wellbeing in the post-Covid workplace. Bristol’s new Clean Air Zone – akin to London’s ULEZ (ultra-low emissions zone) – coupled with the ongoing refurbishment of Bristol Temple Meads railway station will drive demand for offices with the strongest public transport links which can also offer market-leading amenities and communal space.

Steve Oades, Partner and Office Head, Bristol, at Knight Frank, commented: “Bristol’s leading educational institutions, high standards of living and strong transport links to London have contributed to its popularity with talented young professionals, driving increased investor and occupier interest in the city centre.

“Post-pandemic occupiers, recognising the importance of a sustainable, vibrant and attractive workplace for attracting and retaining the best talent, are driving rents  for best-in-class office space in Bristol. Having recorded extremely strong rental growth over the past year as accelerated occupier demand and constrained development squeeze available stock, investors capable of delivering sustainable, well-located and amenity-led workplaces, as well as those able to upgrade existing assets to meet occupiers’ ESG and wellbeing requirements, stand to benefit from further growth in the coming years as a widening pool of employers sharpen their focus on the highest-quality space available.”

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