Cushman & Wakefield has presented its Bristol Property Outlook for 2017 and beyond following a year of unprecedented political change.
The breakfast presentation, held at the Watershed in Bristol city centre, revealed that the commercial property market in the South West has continued to thrive despite political and economic uncertainties including those surrounding Brexit.
Head of investment, Nick Allan said: “Whilst the current climate of uncertainty raises natural concerns – we expect a busy 12 months going forward, with strong rental growth in evidence in both the industrial and Bristol city centre office markets, and investor interest, including international capital, remaining strong.
“In the residential market the burgeoning institutional investment in the private rented sector looks set to continue in Bristol and filter out to the rest of the region. Amongst regional markets Bristol is leading the charge with a pipeline of up to 2,000 units and only 171 units within central Bath.”
“We feel that as in past cycles, brave developers who commit to providing space will be rewarded with strong tenant demand and financial exits.”
In 2016, the South West market largely reflected the national picture as occupiers and investors sat tight in the lead up to the EU referendum and the following uncertainty once Brexit became a reality.
After a difficult year in the investment markets, the presentation highlighted that 2017 has seen the start of a post-Brexit consensus as the key players get on with business in a market defined by under supply in the key industrial and office markets, and a real estate industry struggling to adapt to the pace of disruption in the retail sector.
Richard Pickering, Head of Futures Strategy at Cushman & Wakefield discussed the UK economy and Macro Considerations. He commented: “In spite of the considerable political uncertainty, the UK economy has so far remained remarkably robust. There is a series of good news stories underpinning Bristol’s prospects, including a high weighting to growth sectors.
“Therefore, although we are anticipating a moderated rate of rental growth across the UK, Bristol is set to outperform considerably in most markets in the years to come. Longer term there are deeper structural issues around tech and disruption that are likely to have a bigger bearing on UK real estate than Brexit.”
Pickering summarised that technology and disruption will have a bigger impact on UK and Bristol’s real estate than Brexit.
Nick Allan summarised the problems facing Bristol. He said: “One of the most depressing parts is the arrival to the city – electrification is really important to the city. Bristol needs and deserves this for such an impressive and successful city in the UK.”
The electrification was due to happen in 2017 but plans have now been pushed back to 2020 and it will only run between Bristol and Bath – meaning diesel will be turned on and off throughout the journey.
Another problem facing the city is the uncertainty surrounding the Bristol Arena. Continued funding and planning permission issues have delayed the planed start of the build until 2020/21.