Edinburgh and Glasgow 'will enjoy skyrocketing economic growth in 2022'

Economic growth in Edinburgh and Glasgow is set to more than double in 2022, with the two cities on track to achieve record levels of employment, strategic property advisor Avison Young is predicting.

By Emma Newlands
Friday, 21st January 2022, 4:55 am

The firm, which has offices in both locations, said Edinburgh is forecast to see its gross value added increase to an “impressive” 5.5 per cent this year, more than double its pre-Covid, ten-year average of 2.6 per cent.

During the course of 2022, employment in the Scottish capital is predicted to rise by nearly 8,500 jobs, of which around a quarter will be traditionally office-based. This will take employment to a record high of more than 382,000.

Avison Young also said the office vacancy rate in the centre of Edinburgh was lower at the beginning of 2022 than it was pre-pandemic. That finding follows a recent report from Knight Frank highlighting a buoyant final quarter in 2021 and positive start to this year for office take-up in the city.

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Glasgow is 'well-placed to expand its economic base this year,' according to the report. Picture: Andy Buchanan/AFP via Getty Images.

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Stuart Agnew, MD of Avison Young Edinburgh, said 2022 “looks very much like the turning point for Scotland’s capital” with the local economy and jobs market predicted to grow at a rate of knots. “Importantly for the city’s real estate market, it is expected that a quarter of these new jobs will be office-based roles.

“Despite restrictions being a key constraint on the number of people returning to the office, there continues to be demand from occupiers who are willing and able to take a medium-term view on their occupational needs.

"This has led to increased levels of activity during the latter half of 2021, with the focus very much on prime and new-build accommodation. While uncertainty around the pandemic remains, at this stage it looks like Edinburgh is very much on course for a year of strong growth.”

Turning to Glasgow, the city’s economy is also expected to enjoy major gains, with Avison Young forecasting 5.7 per cent growth during 2022, almost four times its pre-Covid average of 1.4 per cent.

Scotland’s largest city is expected to see 9,600 jobs added to the market, with traditionally office-based roles making up 3,700 of these, and bringing the total number to a record high of 449,000.

Collaboration

Avison Young added that Glasgow continues to experience strong demand for manufacturing space, with new developments looking to take advantage of increased demand from advanced manufacturing companies who are looking for accessible locations where they can collaborate with other high-tech companies, tap into academia and research institutions, attract top talent, and move forward on a pathway to net-zero carbon.

Alison Taylor, who leads Avison Young Glasgow, said: “Our research shows that Glasgow is expected to see impressive growth and job-creation across 2022, with the accommodation and food, arts and entertainment, and education sectors being the main drivers.

“The real-estate market is predicted to have a strong year, with new demand coming from entrants in the research and development, bio-science and technology sectors.

"The demand from small businesses for flexible office space is also likely to increase the provision across the market, with a number of high-profile operators who provide flex space already looking at the city. Assuming Covid restrictions continue to be lifted, 2022 looks set to be a great year for Glasgow’s economy.”

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