Lack of office space sees rise in demand for refurbishment opportunities
Previously there has been a lot of focus on the conversion of office space in Bristol to alternative uses including residential and student accommodation. During 2015, however, we have seen the lack of office space available in the City drive the demand for value-add opportunities. We estimate there is 200,000 sq ft of refurbishment opportunity space either currently on the market or coming to the market this year.
The demand for this refurbished space is being driven by heavily constrained supply in the City and the ability for landlords to add value to property as office prices rise. Currently Grade A office supply is less than 200,000 sq ft, which is an all time low in Bristol City centre. Alongside this quoting rents have risen to £32.50 sq ft - an all time high for the city.
This lack of prime space has also meant we are seeing several schemes being considered for development that were preciously mothballed during the recession including Glassfields and Bank Place. Planned speculative development is anticipated to begin in 2016.
Demand from the occupiers has been more subdued in 2015 but this is set against a Q4 in 2014 which was the strongest quarter on record in terms of Bristol take-up. Sentiment in the market is still very strong and going forward we expect 2016 to be another good year where we anticipate new developments begin to attract a number of new occupiers to the region.