An overview of the commercial property market in Bristol

According to property consultants at Jones Lang LaSalle, the commercial property market in Bristol is slowly moving towards recovery, following a rather bleak period caused by the recession. In fact, during 2012, take-up rates for all types of commercial properties in the city have exceeded analyst predictions and in some areas are up to 25 per cent higher than the quarterly average for the past five years.

Global property consultancy Knight Frank carried out a survey that positioned Bristol as Europe's second strongest commercial property market, being ahead of key economic centres like London or Brussels. This survey also pointed out the strong future potential for further commercial property developments in the city.

The key locations for commercial property in Bristol are:

Temple Circus and Temple Quarter Enterprise Zone - A site covering 173 acres of prime commercial space that includes both new build and refurbished office floor space and that attracts mostly businesses in the fields of media, creative, and technology.

Cabot Circus - This is a £500 million investment devoted to retail and leisure, which has over 1 million square foot of retail floor space.

Bridgewater House - A leading office location offering 110,000 square feet of Grade A office space that is available for rent at £27.50 per square foot.

Linear Park - Linear Park is Part of the Temple Quay area and offers office units of 3,500 square feet and up.

Broadmead - Recent redevelopment has positioned this area as the South West's largest retail centre, and its completion will increase commercial floor space availability in Bristol by almost one third.

Bristol Business Park - This is one of the most popular locations for companies wishing to open an office in the Bristol area. Office units range from 2,000 to 55,000 square foot and current vacancy levels are impressively low at only 1 per cent.

Floating Harbour - The area around Bristol's historic harbour has been undergoing redevelopment for a few years already, and as a result, the area has become a premier location for office and retail floor space. The latest addition to the list of available commercial property in this area is a 30,000 square metre project that offers Grade A office space and small retail units.

Office space in Bristol

Grade A office space take-up rates were more or less stable between 2001 and 2010, at approximately 300,000 square feet per year (with the exception of 2009, when take-up rates dipped significantly). This fact, coupled with rather constant levels of Grade A office availability, means that the office property market in Bristol enjoys from a good balance between supply and demand. The current supply-demand ratio stands at 1.5 per cent, although analysts believe that this figure could rapidly turn into a situation of under-supply after 2013.

The highest number of enquiries are for office properties that range between 2,787 and 4,645 square metres, and there is increasing interest in refurbished (Grade B) office space along Bristol's waterfront.

Prime rental costs seem to be slightly rising, and they are currently set at £27.50 per square foot. Out of town rental costs stand at £21.50 per square foot, although take-up rates for this type of property are rather low at 50,000 square feet during the third quarter of 2012. Prime yields for office space in Bristol have experienced a decrease from 7.5 per cent in 2009 to the current rate of 6.35 per cent.

By the end of 2013, an additional 240,000 square feet of office space will be available in Bristol, as projects currently underway reach completion.

Retail space in Bristol

Bristol has one of the most vibrant retail scenes in the United Kingdom. Over the past four years, mixed-use developments that combine retail and residential properties seem to be on the rise, as it is the case of Cabot Circus, which has overall occupancy levels of up to 97 per cent.

Approximately 49 per cent of the total retail floor space in Bristol is occupied by independent retailers, and as of February 2012 retail vacancy rates were of 14.6 per cent. Average costs per square foot are set at £15.

According to the local city council, an additional 355,000 square metres of retail floor space will be completed by 2026, so the future of retail property in Bristol looks bright.

Industrial space in Bristol

The latest data shows industrial take-up levels in Bristol at 969,000 square feet per year. Following a large transaction for an industrial unit of 246,000 square feet, the availability of good quality industrial space in Bristol seems to be compromised. This situation mirrors the general trend in the South West of England, where most industrial estates experience full occupancy and yet there are very few new developments underway.

Current rental prices for industrial space range between £5 and £7 per square foot.