Top 50 law firm Birketts has taken more floorspace at Melford Capital's EQ offices in a deal that is understood to have set a new record headline rent for the regions.
Market sources told CoStar News that Birketts has agreed to take an extra circa 8,000 square feet at 111 Victoria Street, which was bought by Melford at the end of last year for £103 million.
Sources said Birketts will pay £50 per square foot for the additional space on the third floor, with the firm already occupying circa 7,400 square feet on the same floor, according to CoStar data.
The deal means that regional office rents have hit the £50 per square foot mark for the first time, with Bristol's tight supply of prime accommodation a contributing factor.
EQ previously set a new regional headline office rent last year when law firm Knights signed for 6,000 square feet on the top floor of the property, paying £48 per square foot.
Patrick Scanlon, senior director of market analytics at CoStar, predicted rents will continue to climb in the city, with local agents suggesting to CoStar News that such deals are already in the works.
"Overall vacancy rates in Bristol remain high by historic standards; however, competition for the limited top-quality available space remains intense. We are seeing this played out across many of the UK’s larger office markets, and as the pipeline shrinks, we are likely to see even stronger upward pressure on prime rents in Bristol and beyond."
A number of large firms have committed to deals this year in Bristol, with the biggest being Rolls Royce's-recent circa 90,000-square-foot letting at 100 Bristol Business Park, subletting the out-of-town space from Babcock.
Bristol-based agency CSquared in its second quarter market report found that the city centre recorded 118,658 square feet of take-up with professional services making up more than a third of this.
It predicts that there will be increased competition for schemes with good amenity and large floorplates as occupier demand improves in the city.
Cushman & Wakefield's Market Beat Regional and South East Offices analysis for the second quarter of this year also states that demand-supply imbalances, fuelled by occupiers' preference for best-in-class space is likely to put further upward pressure on headline rents throughout the rest of 2025.
Cushman & Wakefield and JLL declined to comment while Melford Capital Advisers and Birketts were approached for comment.