Around 200,000 sq ft of office space in Bath has been converted for residential use over the past few years, creating a ‘chronic’ shortage of business accommodation and forcing growing firms to consider relocating to Bristol, according to a new report.
But while the amount of available quality office space has dwindled in the past five years, a number of upcoming schemes should help stem the tide of firms looking to leave the city, says national property consultancy Lambert Smith Hampton (LSH). 
The firm’s annual South West Office Market Report, which provides investors, developers and occupiers with detailed insight into the region’s supply, demand and deals activity, reveals office take-up in Bath in the year to the end of June was just over 93,000 sq ft – up 6% on the 10-year average.
However, as a result of lack of supply, the first half of 2017 had take-up of just 27,917 sq ft. The largest deal in this period was Clarendon Business Centre’s 14,000 sq ft lease at Cambridge House South.
The report also shows the extent of the reduction in quality office space available in Bath over recent years. In 2012 it stood at 305,000 sq ft but is now less than a third of that figure at just 95,217 sq ft – equivalent to a little more than a year’s worth of supply, one of the lowest of any UK city.
The shortage has led to Bath businesses facing a huge problem if they need larger offices. In July Bath Business News revealed that fast-growing Bath brand, creative and digital agency Mr B and Friends planned to move to Bristol after failing to find a suitable office in its home city to meet its expansion plans.
Other Bath firms to head down the A4 include online investment platform developer Parmenion and specialist software engineers Purple Secure Systems.
However, the LSH report points to a number of new developments in the pipeline which will bring much-needed office space to the Bath market.
These include Bath Quays South, part of the city’s Enterprise Area, which is set to provide 90,000 sq ft of offices when it completes in 2019.
Nearby, TNC plans to develop Bath Quays Studios with 40,000 sq ft of office space targeting smaller tech occupiers, while Bath Quays North has permission for 200,000 sq ft of offices with work also expected to start in 2019.
Developer Ediston Real Estate plans to speculatively develop 113,000 sq ft of Grade A at Pinesgate.
LSH South West head of office agency Peter Musgrove, pictured, said: “Bath is a very attractive location for occupiers, but the acute shortage of supply restricts leasing activity.
“Any peaks in take-up are largely as a result of good quality offices coming onto the market which are quickly absorbed.
“There are limited options for expanding companies to stay within the city, and the trend we are witnessing is that many are forced to consider relocating to Bristol where there is more choice for modern occupiers.”
While take-up in 2017 will be down on last year, the new developments will bring much-needed stock to the market and crucially, should help retain expanding companies in the city, he said.
While the report predicts that prime office rents in Bath will remain stable due to a lack of supply, it forecasts that the new developments at Bath Quays will trigger rent rises beyond the current level of £31 per sq ft when new space comes to the market.
