Author: Phil Morton

Rents rise against a slight tightening of supply…but options remain

Rents on the move again, with improving take up…MORTONS MARKET MONITOR – H1 2024

[Bristol, Qu1 24]: Morton Property Consultants, acting on behalf of Veale Wasbrough Vizards, is pleased to announce the successful letting of prime office space to a major Bristol occupier. The deal not only underscores Frazer Nash’s commitment to, Bristol and excellence in the workspace but also highlights Veale Wasbrough Vizards’s exceptional expertise in facilitating the transaction.
The recently secured office space, of 13,831 sq ft stands as a testament to Morton Property Consultant’s unwavering dedication, and persistence to meeting their clients requirements in the letting of the accommodation. With meticulous attention to detail and a client-centric approach, Morton Property Consultants and Veale Wasborogh Vizards have seamlessly facilitated the leasing process, ensuring a smooth and mutually beneficial agreement for all parties involved.
“We are overjoyed to have played a pivotal role in this significant letting,” remarked Phil Morton, Director at Morton Property Consultants. “This successful letting not only demonstrates our expertise but also reflects the trust our clients place in us to deliver exceptional results.”

CoStar Awards Quarterly Deals Winner Qu3 2023

We were delighted to be recognised by @CoStarGroupUK as a Q3 2023 #CoStarAwards winner for Evelyn’s lease at EQ, Bristol.

Evelyn Partners is the latest professional services firm to relocate Bristol office to showpiece development. Morton Property Consultants acted on behalf of Evelyn.

National wealth management and professional services group Evelyn Partners is to move its Bristol office to a new, highly sustainable flagship development just a stone’s throw away.

The firm will transfer its 250-strong Bristol team from Portwall Place, where it has been based for the past 15 years, to the nearby EQ building on Victoria Street.

The shortly-to-open 200,000 sq ft development is Bristol’s first new office scheme to target operating with net zero carbon in accordance with the UKGBC framework.

It will be all electric, with solar panels while rainwater will be collected and reused, and a target of zero waste being sent to landfill.

Evelyn Partners will join global banking giant HSBC, fast-growing fintech firm Paymentsense and global engineering and consultancy group Arup in the building, which has been developed by London-based property investment group CEG and will feature a rooftop bar, restaurant and business lounge with communal terrace and 50-seat auditorium, as well as a fitness suite.

Paymentsense has signed up to take 54,767 sq ft at EQ, while HSBC is to occupy 11,000 sq ft. Evelyn Partners is to move into 27,382 sq ft, taking up the building’s entire fourth floor while global engineering and consultancy group Arup has confirmed it will take all of the 27,377 sq ft second floor.

The building, which was the largest speculative scheme in the South of England when work started on it in 2020, is now around 65% pre-let.

EQ is one of a number of major office schemes around the city centre to benefit from a post-pandemic ‘flight to quality’ as firms look for modern, flexible space to tempt employees into the office while also boosting their own ESG (environmental, social and governance) credentials.

Evelyn Partners joins a number of professional services firms to relocate their Bristol bases to these new offices, including international law firm Osborne Clarke (MPC acted) and Big Four accountants Deloitte – which have both moved to Halo – and law firm Clarke Willmott (MPC acted), which is heading to Assembly.

Evelyn Partners said its new office would provide modern working accommodation while also giving it space to continue its ambitious regional growth strategy.

The office will provide flexibility for staff to work at desks and in collaborative areas. Clients will benefit from the suite of meeting rooms as well as the building’s amenity spaces, which include an auditorium and terrace.

Evelyn Partners’ Bristol team provides a range of services to support clients in personal financial affairs and business interests, including tax advice, assurance and accounting, financial planning and investment management.

Evelyn Partners Bristol office managing partner Nigel Hardy said: “Our teams in Bristol have watched the EQ building being constructed close to our current offices over the past couple of years and it’s exciting to now have agreed terms at this phenomenal development”.

“As with our current Bristol office nearby, EQ is well located and will provide a fantastic working environment for our staff. We also know our clients will enjoy meeting their advisers in our new meeting rooms and attending events at the building.”

He said the new office would allow the firm to continue its rapid expansion in the region under the local management team, and so provide services to more clients.

“Taking space at this building also supports our commitment as a firm to environmental sustainability and achieving net zero greenhouse gas emissions in our corporate operational footprint,” he added.

CEG investment manager Paul Richardson said as well as its outstanding sustainability and hi-tech specifications, EQ was also raising the bar in terms of occupant wellbeing.

This included providing around 20,000 sq ft of amenities such as its rooftop hospitality space and business lounge with communal terrace, a ground-floor café kitchen and its auditorium, as well as a fitness suite and break-out space “making it incredibly appealing to businesses wanting to attract and retain the best talent”, he added.

Evelyn Partners was formed a year ago following the merger of Smith & Williamson with Tilney.

The firm has £53bn of assets under management, making it the UK’s fifth largest professional services business by fee income.

Bristol is one of 28 towns and cities across the UK where it has a presence.

Evelyn Partners latest professional services firm to relocate Bristol office to showpiece development. Morton Property Consultants acted on behalf of Evelyn.

National wealth management and professional services group Evelyn Partners is to move its Bristol office to a new, highly sustainable flagship development just a stone’s throw away.

The firm will transfer its 250-strong Bristol team from Portwall Place, where it has been based for the past 15 years, to the nearby EQ building on Victoria Street.

The shortly-to-open 200,000 sq ft development is Bristol’s first new office scheme to target operating with net zero carbon in accordance with the UKGBC framework.

It will be all electric, with solar panels while rainwater will be collected and reused, and a target of zero waste being sent to landfill.

Evelyn Partners will join global banking giant HSBC, fast-growing fintech firm Paymentsense and global engineering and consultancy group Arup in the building, which has been developed by London-based property investment group CEG and will feature a rooftop bar, restaurant and business lounge with communal terrace and 50-seat auditorium, as well as a fitness suite.

Paymentsense has signed up to take 54,767 sq ft at EQ, while HSBC is to occupy 11,000 sq ft. Evelyn Partners is to move into 27,382 sq ft, taking up the building’s entire fourth floor while global engineering and consultancy group Arup has confirmed it will take all of the 27,377 sq ft second floor.

The building, which was the largest speculative scheme in the South of England when work started on it in 2020, is now around 65% pre-let.

EQ is one of a number of major office schemes around the city centre to benefit from a post-pandemic ‘flight to quality’ as firms look for modern, flexible space to tempt employees into the office while also boosting their own ESG (environmental, social and governance) credentials.

Evelyn Partners joins a number of professional services firms to relocate their Bristol bases to these new offices, including international law firm Osborne Clarke (MPC acted) and Big Four accountants Deloitte – which have both moved to Halo – and law firm Clarke Willmott (MPC acted), which is heading to Assembly.

Evelyn Partners said its new office would provide modern working accommodation while also giving it space to continue its ambitious regional growth strategy.

The office will provide flexibility for staff to work at desks and in collaborative areas. Clients will benefit from the suite of meeting rooms as well as the building’s amenity spaces, which include an auditorium and terrace.

Evelyn Partners’ Bristol team provides a range of services to support clients in personal financial affairs and business interests, including tax advice, assurance and accounting, financial planning and investment management.

Evelyn Partners Bristol office managing partner Nigel Hardy said: “Our teams in Bristol have watched the EQ building being constructed close to our current offices over the past couple of years and it’s exciting to now have agreed terms at this phenomenal development”.

“As with our current Bristol office nearby, EQ is well located and will provide a fantastic working environment for our staff. We also know our clients will enjoy meeting their advisers in our new meeting rooms and attending events at the building.”

He said the new office would allow the firm to continue its rapid expansion in the region under the local management team, and so provide services to more clients.

“Taking space at this building also supports our commitment as a firm to environmental sustainability and achieving net zero greenhouse gas emissions in our corporate operational footprint,” he added.

CEG investment manager Paul Richardson said as well as its outstanding sustainability and hi-tech specifications, EQ was also raising the bar in terms of occupant wellbeing.

This included providing around 20,000 sq ft of amenities such as its rooftop hospitality space and business lounge with communal terrace, a ground-floor café kitchen and its auditorium, as well as a fitness suite and break-out space “making it incredibly appealing to businesses wanting to attract and retain the best talent”, he added.

Evelyn Partners was formed a year ago following the merger of Smith & Williamson with Tilney.

The firm has £53bn of assets under management, making it the UK’s fifth largest professional services business by fee income.

Bristol is one of 28 towns and cities across the UK where it has a presence.

US-based Unicorn company Pax8, which has in just a few years created a marketplace for IT professionals to buy cloud-based technology products, initially set up their European HQ in Bristol (Sept 2020), with a soft-landing mid pandemic in a small suite in serviced offices at Runway East through Morton Property Consultants (MPC). Subsequently MPC introduced them to Invest in Bristol and Bath (IBB) who then worked together with PAX8, providing both private and public support to secure their long term inward investment into the city.

Pax8’s growth from that point was so rapid, with projected further growth to over 150 – 220 heads in the next few years, that they required substantially larger accommodation.

Morton Property Consultants then co-ordinated and led the subsequent

property search, identifying No2 The Distillery as an ideal office in terms of size of space, (24,375 sq ft), quality of Grade A new accommodation, ESG credentials, flexibility both physically and contractually, within a high profile building in a prime location close to the mainline railway station at Temple Meads.
The deal kick started the occupation of 92,000 sq ft Distillery development which has revitalized the whole of Avon Street.

There are several significant ways in which this deal shows an innovative way forward for the Bristol property market, especially as the city continues to grow in importance – nationally and internationally – within the creative and tech sector, and attract new high growth inward investors as well as foster the future for indigenous businesses.

Firstly, securing the inward investment of Pax8 was achieved through a long period of close collaborative work (much of it during the Covid lockdown) between Morton Property Consultants (who received and acted upon the initial lead) and IBB, who went to extreme lengths to smooth the path of the company’s entry into the UK – including working closely with various Government departments to help Pax8 make important contacts and overcome bureaucratic barriers.

Secondly, this was one of the first times that a “Cat A+” deal of this size had been struck within the city (with the fit-out funded through additional rental terms rather than an upfront payment), and it is by far the highest profile one to date. This presents a template for many tenants on a sharp growth trajectory to occupy space in some of our newest buildings (which invariably require a fit-out prior to occupation), and for landlords to attract high growth tenants.

While the initial requirement was for 13,887 sq ft, based on a 10 year lease with tenant break clauses in year five and three, the rapid growth of the business during the legal process lead to an increased requirement of 24,375 sq ft based on a 10 year lease with a 5 year break on the brand-new building. The open market rent level was agreeable to Pax8, however the projected cost of the fit out would have meant significant upfront capital expenditure, while they preferred to use their capital reserves to recruit new personnel and grow the business.

To meet that requirement, a separate agreement was negotiated with Royal London Asset Management, through Morton Property Consultants, taking out one of the breaks at year three, and in return the landlord would complete the “Cat A+” fit out to the tenant’s design but at the landlord’s expense, with the cost to be repaid in the form of an additional “CAT B” rent to be paid over the first five years of the lease.

This allowed Pax8 to occupy a building they felt would enable them to recruit the large numbers of high calibre of staff they needed to rapidly reinforce their foothold in the European market, without calling upon their capital reserves.

The deal not only helped reinforce Pax8’s commitment to Bristol, but also showcased an innovative way forward for other fast-growing businesses in the city to expand their operations in a way that allows them to fund their business space through revenues, rather than through funding or borrowing… and encourage other landlords in the city to offer similarly attractive arrangements to the owners of No 2 The Distillery (RLAM).

The steep trajectory of the tech sector in Bristol has brought large numbers of well-paid jobs to the city, but the subsequent shortage of skilled staff can make recruitment problematic. Offering a quality workspace designed specifically to this sector’s requirements provides a major recruitment tool, as the work environment figures very highly in their staff’s priorities.

The importance of securing Pax8 as an occupier has huge ramifications for Bristol’s reputation as being “open for business” for the world’s big future employers.

In Pax8’s words, “As a business looking for a highly motivated, energetic workforce, Bristol was the obvious choice for Pax8. We were also looking for a city with a lot of ambitious, energetic talent, and the universities based in and around Bristol were a major draw.”

Having all of these attractions as a city means nothing if Bristol’s property sector cannot offer the kind of flexible and imaginative solutions that these companies need to meet the demands of their workforces and their boards. The deal struck in behalf of Pax8 demonstrates a way forward that will encourage enlightened landlords and developers to adapt to the new commercial imperatives driving our economy and offer similar terms.

PROPERTY DEAL OF THE YEAR:

US-based Unicorn company Pax8, which has in just a few years created a marketplace for IT professionals to buy cloud-based technology products, initially set up their European HQ in Bristol (Sept 2020), with a soft-landing mid pandemic in a small suite in serviced offices at Runway East through Morton Property Consultants (MPC). Subsequently MPC introduced them to Invest in Bristol and Bath (IBB) who then worked together with PAX8, providing both private and public support to secure their long term inward investment into the city.

Pax8’s growth from that point was so rapid, with projected further growth to over 150 – 220 heads in the next few years, that they required substantially larger accommodation.

Morton Property Consultants then co-ordinated and led the subsequent property search, identifying No2 The Distillery as an ideal office in terms of size of space, (24,375 sq ft), quality of Grade A new accommodation, ESG credentials, flexibility both physically and contractually, within a high profile building in a prime location close to the mainline railway station at Temple Meads.

The deal kick started the occupation of 92,000 sq ft Distillery development which has revitalized the whole of Avon Street.

There are several significant ways in which this deal shows an innovative way forward for the Bristol property market, especially as the city continues to grow in importance – nationally and internationally – within the creative and tech sector, and attract new high growth inward investors as well as foster the future for indigenous businesses.

Firstly, securing the inward investment of Pax8 was achieved through a long period of close collaborative work (much of it during the Covid lockdown) between Morton Property Consultants (who received and acted upon the initial lead) and IBB, who went to extreme lengths to smooth the path of the company’s entry into the UK – including working closely with various Government departments to help Pax8 make important contacts and overcome bureaucratic barriers.

Secondly, this was one of the first times that a “Cat A+” deal of this size had been struck within the city (with the fit-out funded through additional rental terms rather than an upfront payment), and it is by far the highest profile one to date. This presents a template for many tenants on a sharp growth trajectory to occupy space in some of our newest buildings (which invariably require a fit-out prior to occupation), and for landlords to attract high growth tenants.

While the initial requirement was for 13,887 sq ft, based on a 10 year lease with tenant break clauses in year five and three, the rapid growth of the business during the legal process lead to an increased requirement of 24,375 sq ft based on a 10 year lease with a 5 year break on the brand-new building. The open market rent level was agreeable to Pax8, however the projected cost of the fit out would have meant significant upfront capital expenditure, while they preferred to use their capital reserves to recruit new personnel and grow the business.

To meet that requirement, a separate agreement was negotiated with Royal London Asset Management, through Morton Property Consultants, taking out one of the breaks at year three, and in return the landlord would complete the “Cat A+” fit out to the tenant’s design but at the landlord’s expense, with the cost to be repaid in the form of an additional “CAT B” rent to be paid over the first five years of the lease.

This allowed Pax8 to occupy a building they felt would enable them to recruit the large numbers of high calibre of staff they needed to rapidly reinforce their foothold in the European market, without calling upon their capital reserves.

The deal not only helped reinforce Pax8’s commitment to Bristol, but also showcased an innovative way forward for other fast-growing businesses in the city to expand their operations in a way that allows them to fund their business space through revenues, rather than through funding or borrowing… and encourage other landlords in the city to offer similarly attractive arrangements to the owners of No 2 The Distillery (RLAM).

The steep trajectory of the tech sector in Bristol has brought large numbers of well-paid jobs to the city, but the subsequent shortage of skilled staff can make recruitment problematic. Offering a quality workspace designed specifically to this sector’s requirements provides a major recruitment tool, as the work environment figures very highly in their staff’s priorities.

The importance of securing Pax8 as an occupier has huge ramifications for Bristol’s reputation as being “open for business” for the world’s big future employers.

In Pax8’s words, “As a business looking for a highly motivated, energetic workforce, Bristol was the obvious choice for Pax8. We were also looking for a city with a lot of ambitious, energetic talent, and the universities based in and around Bristol were a major draw.”

Having all of these attractions as a city means nothing if Bristol’s property sector cannot offer the kind of flexible and imaginative solutions that these companies need to meet the demands of their workforces and their boards. The deal struck in behalf of Pax8 demonstrates a way forward that will encourage enlightened landlords and developers to adapt to the new commercial imperatives driving our economy and offer similar terms.

The latest overview of the Bristol office market.