Like a number of key regional cities, Bristol’s second-hand office stock has been alleviated in the last 12 months by the rise in office conversions to other uses, predominately private residential and student accommodation, due to the Permitted Development Rights Scheme (PDR) which temporarily relaxed planning restrictions on such change of use applications.

This has resulted in a 'tightening' of supply in the middle tier Grade B office market, which has had a positive effect on rents and rent frees. Lewins Place, The Pithay, St Lawrence House and Crown House are just some notable former second hand office buildings that are undergoing conversion. We estimate total office space lost to be around one million sq ft across the City.

Coupled with the tightening of the Grade B office market, Bristol, like the majority of the key regional office markets, is also experiencing a shortage of Grade A office stock, hence the return of speculative development across the City.

Salmon Harvester’s 2 Glass Wharf scheme (c.98,000 sq ft) is due for completion in Q4 2014 and Skanska's 66 Queen Street (circa 60,000 sq ft) is due for completion mid-2015.

Total Grade A availability in Bristol currently stands at circa 370,000 sq ft with Cubex Land’s Bridgewater House (see front page), being the most prominent building of the current built stock having recently undergone extensive improvement works. This has resulted in a top rent of £27.50 per sq ft being achieved in the building in the first half of 2014.

Due to these tight levels of supply, upward pressure looks set to continue on top rents in Bristol, indeed, we have already seen the first signs of this with PwC going under offer at 2 Glass Wharf at a headline rent of £28 per sq ft. Once complete this transaction will mark the end of a seven-year stagnation in Bristol's top rents.

Taken from
Spotlight: Regional Office Market Report - October 2014