Edinburgh and Glasgow office markets see contrasting fortunes in latest quarter
Scotland’s two largest cities saw contrasting levels of office space take-up in the second quarter but both markets are facing supply constraints, new figures reveal.
Take-up for the Glasgow office market totalled 135,155 square feet between April and June, which is up 9.6 per cent from the second quarter of 2021, according to property advisor CBRE. Total take-up for the year to date stands at 230,651 sq ft, 16.5 per cent up against the same period last year.
Glasgow witnessed two deals in the period that surpassed the 20,000 sq ft marker - Ovo Energy taking 33,905 sq ft at the recently complete Cadworks and serviced office provider Wizu letting 24,350 sq ft across three floors at 2 West Regent Street. Furthermore, there was more activity at Onyx on Bothwell Street with drinks giant Diageo agreeing to let 12,438 sq ft across two floors.
Office supply continues to rise within the city, but “best-in-class” Grade A space remains at a premium, CBRE noted.
Out of the 2.9 million sq ft of office space currently available in the Glasgow market, just 134,194 sq ft of it is considered Grade A, representing just 0.59 per cent of all Glasgow office stock, according to the firm.
Martin Speirs, associate director from CBRE in Glasgow, said: “We are entering an interesting time in the Glasgow office market with Grade A supply continuing to diminish and demand for best-in-class space remaining.
The war for talent is becoming apparent and only with engaging and exciting office space will occupiers succeed in attracting and retaining their best staff, but also, importantly, manage to encourage them back into the workplace.”
Meanwhile, office take-up in Edinburgh totalled 87,168 sq ft in the second quarter, down 45 per cent from the same period in 2021 and down 65 per cent against the Q2 five-year average of 251,458 sq ft. Despite this, the total take-up for the year to date is a “healthy” 206,094 sq ft, CBRE noted.
Notable regearing deals included Scottish Ministers’ 89,000 sq ft space at Silvan House and Skyscanner committing its future to Edinburgh’s Quartermile One by extending its lease.
The quarter’s largest deal was at Exchange Crescent, with Dukosi taking 12,000 sq ft. Copenhagen Offshore Partners transacted 5,318 sq ft at the recently completed 10 George Street and Manor Estates has taken 5,073 sq ft at New Mart Place.
Stewart Taylor, senior director, CBRE Edinburgh, said: “The recovery of the Edinburgh office market continues. The market has also seen an unprecedented level of regears as occupiers delay making a longer term commitment because of both uncertainty over future space needs and the lack of current Grade A availability.
“The flight to quality, a national trend, has been heightened in Edinburgh by sharply diminishing supply and a limited pipeline. With occupiers increasingly focused on employee satisfaction and how the space contributes to their environmental targets, it’s the best buildings that have attracted the strongest interest with reduced focus on rent.
“Occupiers of scale know that to secure the best space they have to move quickly and early.”