Office space in Bath
According to Bath's Local Development Plan, over the past ten years the total increase in office floor space in the city has reached 24,000 square metres. This figure is quite low when compared to other regional centres of similar size, and it reflects the uneasy balance between office floor space gains and losses in the city. Over the past decade, more than 10,000 square metres of what previously was office stock have been redeveloped and converted into residential property or student housing.
Take-up rates were at an all-time high of 140,000 square feet in 2001, but they followed a downward trend until they reached rock bottom in 2009, with annual rates of less than 60,000 square feet. Since then, the market has remained fragile as occupiers are reluctant to take-up space. In 2010, take-up rates for office floor space rose to 75,000 square feet, and have remained more or less static since. Occupier demand was highest for properties of 3,000 square feet and less.
The supply-demand ratio shows a clear imbalance and an over-supply trend. Currently, there are 360,000 square feet of office space available in Bath, and considering the low take-up rates, the over-supply situation could prolong itself for a few more years. Market analysts believe that this trend could be alleviated if some of the current office stock is unlocked for other uses.
Rental values for Grade A office properties have remained stable at an average rate of £20 per square foot, while Grade B stock costs £18 per square foot on average. Out of town office stock is priced at £19.50 per square foot. Prime yields for office floor space continue to drop and are currently set at 6.75 per cent.
In terms of future development, the biggest projects involve the construction of 50,000 square feet of mixed use residential, leisure, and office floor space at Green Park House and Brougham Hayes.
Retail space in Bath
Retail activity is relatively high in Bath's city centre, mostly due to the town's popularity as a tourist destination. There is strong demand for retail floor space in the Southgate area. However, out of town stock is in very limited supply, although there are plans for further development along the Lower Bristol Road.
Current Zone A headline rents are in the region of £250 per square foot, one of the highest rates in the South West. Out of town rents are priced at significantly lower rates of £40 per square foot, although supply levels for this type of properties remains low despite very strong demand.
Although there is little investment activity on dedicated retail floor space, purchasing stock for mixed use purposes seems to be gaining importance in the local market. The latest sales of mixed use retail and residential space reflect net yields of 6 per cent.
According to the local city council, Bath's Enterprise Area has a very large capacity for potential development. Growth of retail floor space is expected to take place in areas like Bath Quays North, Bath Press, Green Park Station, BWR East, and Carrs Mill.
Industrial space in Bath
Over the past few years, the amount of industrial floor space available in Bath has been decreasing at rates that exceed predictions. This trend is particularly evident in areas like the Lower Bristol Road, Locksbrook Road, and Bath's Western Riverside.
Take-up rates have increased slightly in recent years, much in line with the situation in other towns across the south west of England. There are a number of active enquiries for industrial properties at the industrial estates in Coombend, Somerdale, Norton Hill, and Mill End.
Demand for this type of floor space has also been gradually decreasing, and it is currently under 185,000 square feet. New supply has been limited to the areas around Bath's Business Park, where an additional 23,000 square feet of space have been made available.
Headline rents are set at £6 per square foot, which means that they have gone down from the previous three-year average of £7.5 per square foot. Prime yields for industrial property have been estimated at 7 per cent.
