COMMENT: Two separate purchases of sites close to Temple Meads in Bristol’s Enterprise Zone have thrown a spotlight on the wider regeneration of Bristol’s Temple Quarter gateway, writes Julian Harbottle, head of development, Savills Bristol.
The most recently announced deal was described by the MD of Square Bay – the mixed-use developer which bought 10.6 acres between Silverthorne Lane and Feeder Road to the east of Temple Meads – as “a key piece of the jigsaw” in relation to local regeneration that has the potential to unlock further investment into the city.
Alongside Bristol University’s purchase of an additional five acres next to its existing site, which will be home to its Temple Meads campus, the newly acquired sites have been coined ‘Bristol’s King’s Cross’.
There has been significant interest in private rental sector (PRS) investment in Bristol in recent years, but relatively little activity to date.
The reasons for this are manifest: a strong private residential market, which has never been oversupplied; a lack of relative scale; the strength of other regional markets, especially in London and the South East, as alternative investment locations; and a relatively affluent local population which, together, have kept PRS operators on the back foot in the city.
Recent house price growth, for example, has significantly outstripped that of salaries, and the growing unaffordability of housing in the city will not only inhibit its ability to retain new graduates, but also to attract new talent.
However, Bristol is entering a new phase in its development, and certain key factors are starting to change.
The city has undoubtedly punched above its weight over the last decade.
The successful fusion of branding, industrial mix and regeneration that has driven this outperformance is also what has sparked interest from PRS investors seeking to capitalise on the relative value compared to other markets, as well as the positive perception of Bristol as a great place to live and work.
The planned infrastructure improvements in the city, such as a Metrobus rapid transport network and railway electrification, will only add further value to the PRS offer.
Bristol is well recognised on the national and international stage, with the most recent accolades of ‘World’s Smartest City’ and ‘Best Place to Live in Britain’ helping to cement an impressive reputation.
This is reflected in our own research team’s prediction of 27.5% residential rental growth over the next five years – one of the highest rates of inflation nationally.
The scale of the opportunity to the east of Temple Meads is of particular relevance.
As our residential capital markets team notes, large schemes developed in competing cities – such as Clippers Quay in Manchester and Exchange Square in Birmingham – give investors the ability to placemake a micro-location, creating cohesive and integrated communities with high-quality public realm and curated retail and leisure uses.
To date, however, nothing of this scale has been available in Bristol. Indeed, this new scheme is likely to be the biggest and most significant in at least a decade.
The new purchases within ‘Bristol’s King’s Cross’ effectively create a blank canvas for the operators to create the ideal mixed-use environment.
