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Robust occupational demand drives strong H1 performance for South West commercial property market

The South West’s commercial property market performed well in the first half of 2017, supported by robust occupational demand for industrial and office space, particularly from the logistics, TMT and public sectors, says property consultancy Alder King in its mid-year Market Monitor Update

Despite the ongoing political and economic uncertainty, occupational activity has remained resilient, with buoyant transaction levels in many parts of the region.  Of greater concern is the steady fall in stock levels across all size ranges and sectors. 

Office and industrial rental and capital values have increased in many centres including Bath, Bridgwater, Bristol, Gloucester, Swindon and Taunton as supply shortages continue to bite.

Whilst developers remain cautious about speculative office development, there are a number of new build industrial schemes underway in Bristol, Gloucester and Swindon and there is strong demand for office and industrial refurbishments where schemes can be turned around quickly.

The investment market has been held back by a lack of stock.  Prices have been sustained by strong demand and competitive bidding, particularly where benefiting from rental growth or opportunities to add value.

Key features of the half-year occupational market include:

  • Industrial take-up across the South West totalled 4.5 million sq ft, the second highest H1 figure for six years.  A number of significant new build transactions contributed to this, including a 2.2 million sq ft multi-storey distribution facility in Bristol for Amazon.
  • Industrial supply has fallen by 15% in the past 12 months to 3.573 million sq ft, its lowest level for 15 years.
  • The South West office market performed strongly with take-up of 857,000 sq ft, broadly in line with the five year average.  The outlook for the second half of the year looks positive with a number of high profile deals due to complete.
  • Office supply has fallen by 19% across the region in the last 12 months to 2.4 million sq ft, the lowest level for 15 years.

 Major South West Centres: Office & Industrial Demand and Supply (000 sq ft)


Office Demand

Office Supply

Industrial Demand

Industrial Supply

Half-Year 2017





Full Year 2016





Full Year 2015





Full Year 2014





Full Year 2013






Simon Price, partner and head of agency at Alder King, said: “The volume of transactions and take-up figures across the key centres of the South West so far this year have been very encouraging given the ongoing political and economic uncertainty and suggest that for most occupiers it’s business as usual.  We remain optimistic about the outlook for the second half of the year, with several high profile deals in the pipeline.”

Market Monitor Update reviews the commercial property activity in 10 key centres across the South West and South Wales including Bath, Bridgwater, Bristol, Cardiff, Exeter, Gloucester, Plymouth, Swindon, Taunton and Truro.  Download Market Monitor Update

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