• Swindon & Wiltshire Property
• Thursday January 30 2025
• Author Name: Peter Davison

Key centres across South West see record commercial property rents – Alder King

Key centres across the South West are seeing record headline rents for office spaces, according to the 2025 Market Monitor, the flagship publication from commercial property specialists Alder King.

The record rents are being seen both in town and out-of-town, according to the authors of the report, which is celebrating its 30th anniversary this year.

Demand remains concentrated on Grade A spaces, which offer the best ESG credentials as occupier’s desire for lower running costs continues.

In Bristol city centre, rising new-build costs are constraining new developments. This trend is echoed across the wider market, where high-quality existing stock is becoming the focus for occupiers and investors.

These stakeholders are increasingly identifying opportunities to purchase properties at significantly lower values compared to equivalent new-build construction costs.

The industrial sector has also experienced record rents, spanning both prime and secondary stock. Across the region, there is a recognised shortage of supply, which is curtailing take-up.

Adrian Rowley, head of agency at Alder King, said: “Nowhere is this more evident than in our key marketplace of Bristol, where just over 60 per cent of the total supply is account for in three buildings at Panattoni Park and Mountpark 360.”

Further down the M5 corridor, there are built-to-suit schemes available, but as Adrian Rowley continues: “The prospect of new speculative development currently looks slim, as high construction costs along with softened investment yields has impacted the delivery, making it challenging in all but a handful of locations”.

However, renewed demand for mid-box logistics space has led to a series of key transactions, further bolstering the sector.

The retail sector has seen a noticeable bounce-back in major cities such as Bristol and Bath. National retailers are re-establishing a presence on the high street, albeit with a cautious approach in light of the ongoing cost-of-living crisis and increasing occupiers’ costs.

Notably, Marks &Spencer’s decision to return to Bristol and relocate their existing Bath store to SouthGate signals a major boost to the region’s retail scene.

In Swindon, partner James Gregory has welcomed the new council’s vision for the town centre.

The change of political leadership at Swindon Borough Council is seeing renewed attempts to enhance the attractiveness of the town centre,” says James.

“The Bus Boulevard is taking shape and should complete later this year. This will dramatically improve the road network and link the two sides of the centre to one another.”

In the office sector “whilst there has been an overall increase in the supply of office accommodation to let, there is still demand from residential investors seeking to transform lower grade office stock,” notes James.

Across the South West, there is also a growing trend towards repurposing properties for alternative uses. Former Debenhams stores, for instance, are being transformed for residential, educational, and leisure purposes.

While investment activity in 2024 remained relatively subdued, “The outlook for 2025 is more optimistic”, according to Oliver Stretton, head of investment at Alder King.

“Commercial property values are now showing signs of recovery, driven largely by positive rental growth which is evident across most occupier markets,” said Oliver.

“A cyclical buying opportunity now exists, where the strongest returns are typically achieved on investments transacted in the early stages of recovery. We expect this to stimulate increased transactional volumes in 2025.”

Pictured: The Welcome Building, Bristol