Many things can catalyse activity in the commercial property market. Most people tend to think of macro-level levers, like changes to taxes or rates. Some will talk about the importance of confidence in the local market. Others will look to additional asset classes and their performance.
But reception refurbishments also have their part to play. In the last few months we’ve seen a flurry of reception refurbishments as landlords seek to relaunch Grade A buildings. In Edinburgh alone, extensive renovation work has taken place, or is set to get under way, at Edinburgh Quay 1, Edinburgh Quay 2, 1 Lochrin Square, 40 Torphichen Street, Exchange Tower, Caledonian Exchange and Tanfield.
These projects are indicative of an underlying strength in the local market. The number of recent reception refurbishments in Edinburgh reveals the domino effect this work can have: when one office renovates its space, others imitate.
This is happening while competition for space in Scotland’s central belt has seldom been hotter. Grade A space in Edinburgh is at a premium. In Glasgow we’re seeing more refurbished Grade B properties come on to the market.
The race for the best properties is so intense we’re seeing more “grey space” coming on to the market in Edinburgh – office stock sub-let by occupants. The city’s historical significance means that new developments are few and far between in its core, and its popularity as a tourist destination also adds pressure. We’ve seen a number of “grey” offices converted to hotels and serviced apartments, further reducing office supply.
In this context, the role played by a property’s reception can’t be over-estimated. They are often the first impression anyone gets of the interior. Aspects like lighting and finishes are of the upmost importance to making the most of this area.
From a landlord’s perspective, the reception can show the space behind them in the very best light, making it a more attractive proposition and potentially shortening the “void” period between tenants. Importantly, receptions are one of the few aspects that can set one building apart from another. For occupants, it’s an important part of how the business presents itself to clients.
Receptions may not be high on the list of commercial property barometers, but they can tell you a great deal about the strength of feeling in a local market.
Toby Withall is office agency partner, Knight Frank