Hunt for city office space moves further afield

Savills highlighted a lack of Grade A office space in Glasgow. Picture: John Devlin

Savills highlighted a lack of Grade A office space in Glasgow. Picture: John Devlin

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Businesses are being forced to look for offices outside of city centres in Scotland’s key locations due to a lack of suitable space and rising rents.

Savills’ latest Scottish Office Market report found that take-up of office space outside the central business districts of Aberdeen, Edinburgh and Glasgow was 4 per cent higher in the first quarter of 2016 than the previous quarter.

The trend is forecast to increase as occupiers continue to be attracted by the low rents on offer in out-of-town locations, where in some cases there can be a 50 per cent discount on the £30 per sq ft prime rents being achieved in city centres.

READ MORE: Robust start to the year for key city office markets

Mat Oakley, head of commercial research at Savills, said: “The out-of-town markets are on the cusp of experiencing a resurgence in popularity, particularly in Edinburgh and Glasgow and primarily due to occupiers being able to save money on rents compared to inner city locations.”

Savills’ research shows demand for office space across Scotland has increased significantly this year and, combined with further employment growth and falling availability of Grade A space, it has led to a squeeze in supply.

Total supply in Glasgow has now fallen below two million square feet for the first time since 2011, with only approximately 500,000 sq ft of Grade A space available.

In Edinburgh availability has steadily fallen since its peak in 2008. Savills estimates that there is now only 2.1 million sq ft of office space both in the city and in the out-of-town market, of which only 365,000 sq ft is Grade A.

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