Business Leader magazine has published an article, which looks at how the Bristol commercial property sector is evolving and how the needs of scale up businesses looking for Grade A office space can be met.
Gavin Bridge director at Cubex believes that the lack of grade A office space could be down to cautious investors and developers not wanting to build on a speculative basis.
“This could be because investors are too cautious or the buildings they have designed are too large for the market.
“What I mean by this is that with buildings over say 100,000 sq. ft their underlying investors will inevitably want a degree of pre-letting of the space.
“Whilst there have been some exceptions over the years, occupiers taking significant pre-lets are not common. That is why Cubex and its investor partners at Palmer Capital opt to speculatively build.
“We have seen great success with our business plan of speculatively developing office buildings of 50-100 thousand sq.ft most recently with our Aurora office building at Finzels Reach in Bristol City Centre.“
Bristol has made good strides in dealing with the issue of trying to provide varying space for growing businesses, with projects such as mixed-use development Wapping Wharf and Finzels Reach making a splash in the city centre and creating vibrant atmospheres, with the introduction of
The driving force behind Finzels Reach, one of the South West’s most significant mixed-used schemes, is local developer Cubex, together with its funding partner Palmer Capital.
Meanwhile, Generator Building is the latest phase of high quality Grade A office development at Finzels Reach, which is also home to Aurora, a major speculative scheme which completed this summer, and Bridgewater House. This is an example of where Grade A office space Is being delivered in keeping with Its surroundings.
Peter Walford, director of Cubex, said:
“It is fantastic for this exciting project to give a new lease of life to one of Bristol’s landmark buildings. With a rich history linking the building to 20th century transport innovation, it will offer something truly unique to the office market at a time when demand for workspace for the burgeoning tech, creative and media sectors is high.”
In September, contracts were exchanged on the sale of Aurora to a major UK investment fund with over 85% of the state-of-the-art space now let at record rental levels.
The 95,000 sq. ft ‘Grade A’ office building, part of Finzels Reach, was sold by Cubex for £62m to Royal London Asset Management, achieving a 4.75% net initial yield.
Aurora has consistently been able to secure record headline rents throughout its construction, being the only ‘Grade A’ office space developed this year in a city with limited supply. With key lettings at Aurora coming from Simmons & Simmons who signed for 27,000 sq. ft.
Andy Heath, commercial property agent at Cushman & Wakefield, commented:
“There is one floor remaining at Aurora, a scheme which has been highly successful and benefited from being brave and building speculatively when nobody else was.
“The other new space is predominately refurbished space. The style of space coming through will be interesting because as rents and values increase, occupiers become more demanding of the quality of space they want to occupy, which will lead to developers delivering higher quality buildings – which in turn will drive rental growth further.
“It will not be long before we witness rents at high £30s per sq. ft. in the city centre.”’
For the full article, click here. First published December 2018.
For more information about Cubex, visit their website.