Growth in these sectors will underpin employment growth, with the city due to add 8,300 jobs during the course of the year – 3,400 of which will be traditionally office-based jobs. The workforce is forecast to be 2.6% higher than it was at the end of 2019 - highlighting the city’s ability to bounce back and the attractiveness of the city to those leaving London. The unemployment rate is forecast to fall to 3.8%, which is very low by national standards but still higher than the 2019 figure of 3.3%.

As with a number of leading cities across the UK, we will continue to see increased demand for flexible workspace providers. 2021 saw provision increase, with Runway East and DeskLodge taking additional space to the city.

Demand for Grade A space continues to be relatively robust, with the second-hand letting environment seeing a greater impact. There is continued development appetite with several schemes onsite, including CEG’s 184,000 sq ft EQ, the 200,000 sq ft Wellcome building and the next phase of Assembly, Assembly B&C (120,000 sq ft). In addition, the refurbishment of Tower House is due to come to market in early 2022.

Developers are pushing health and wellbeing, and with the high levels of employment, there is an understanding that businesses need to use real estate to attract and retain staff.

There will be a significant erosion of retail stock over the next few years; the Galleries shopping centre will be the subject of mixed-use redevelopment plans, with plans being mooted to convert some of the space into other asset classes, including residential; a preferred bidder has been appointed to redevelop the former Debenhams building; AEW has acquired four mixed use properties in the city centre for "significant redevelopment".

The city’s diversity of offering remains attractive and will continue to evolve – Breaking Bread on the Downs has been a magnet, whilst reduced footfall during times of lockdown created an opportunity for the city council to increase pedestrianisation and on-street dining opportunities. Gravity will come into the city centre during 2022. Cribbs Causeway is seeing a cluster of new leisure openings nearby, with the surfing lagoon making up part of the offer.

Construction will finally start on the new YTL Arena (the former Brabazon Hangar site in Filton) during 2022 which is due to open in 2024. Plans will be submitted to redevelop the site of Bristol Zoo, which will relocate from Clifton to its Wild Place Project site at Cribbs Causeway, which is also expected to open in 2024. Consent has already been granted for 62 homes on the west car park site at the zoo.

In the Bristol area, the lack of any strategic sites for industrial development, aging stock and competition from alternative land uses is driving occupiers out of the city to Severnside and beyond. This is also set against pressures in the market for ‘last mile‘ delivery and internet fulfilment occupiers who demand city centre locations.

The combination, alongside other forces from the strongest industrial market for 20 years, is a pattern of record rental (£9 per sq ft), land value growth and yield compression for any available stock. Notable recent moves included Oxford Instruments Plasma Tech moving from Yatton and Bart Ingredients expanding to Avonmouth, a total of 250,000 sq ft combined. DFS have also recently taken 244,000 sq ft of logistics space in Bristol, confirming the city’s status as a strategic location.

The need for housing has been reflected in Bristol’s land market and we expect this to continue to be very competitive in 2022, with strong appetite from investors and developers across all the residential sectors. However, the planning issues in Bristol and across the wider region will mean that a Local Plan and Spatial Development Strategy will not likely be agreed until 2023 at the earliest, casting a shadow over housing targets and potential new development sites.

Of the residential sectors, perhaps the hottest will be PBSA. As with housing there has been an undersupply of student schemes which against a very strong demand backdrop, has meant opportunities are extremely sought after. Accordingly, assets in Bristol have shown the keenest yields outside of London, Oxford and Cambridge. With the strength of the city’s higher education institutions and appeal to students, particularly from overseas, the demand picture will remain very strong. This will likely be reflected in continued yield compression and rental growth in 2022.