Credit fears hit demand for Glasgow office space

Published on Saturday 16 August 2008 15:44

THE number of companies taking up new office space in Glasgow over the past six months has slowed to less than a quarter of the corresponding period last year.

The latest quarterly business briefing by commercial property firm Cushman & Wakefield (C&W) shows only 98,268sq ft was leased in the six months to June 2008, compared with 427,431sq ft at the same point in 2007.

It found that the credit crunch has reduced demand for office space, particularly because of the Glasgow market's dependence on banking and finance sectors, which are exposed at times of economic turbulence.

C&W said there is also a shortage of well-specified office space at the top end of the market and this has played a part in the slowdown in transactions.

But while office occupancy rates are considered a barometer for the wider economy, the report suggests the slowdown may be temporary as there is further new space due to come on to the market.

It said 148,000sq ft of space is coming on-stream at the end of 2008 and a further 712,404sq ft during 2009.

Andy Cunningham, partner within the office agency team at C&W, said: "Our early concerns in the first quarter of the year have proved to be well founded. There has been a marked drop in the number of office space transactions due to a lack of offices with large floor plates.

"Allied to this is a general concern about the current state of the economy."