Acres of office space unoccupied as property transactions tumble

Although the availability of new “Grade A” space continues to decline in the city, more than 120,000 sq ft of secondary Grade B space up to ten years old became available during the first six months of the year as occupiers took advantage of depressed conditions to upgrade their offices.

Meanwhile, increasing amounts of older Grade C floor space remains neglected as both refurbishment and new development has ground to a halt.

Figures from property consultants Colliers International show net absorption of Glasgow office stock fell by 89,054 sq ft as uptake in the city’s core in particular tumbled 29 per cent in the six months to June. This was in contrast to 2010, when total occupation rose by 263,545 sq ft.

Guy Grantham, director of research and forecasting at Colliers, said: “The major encouragement on the horizon is that there are probably about ten active requirements for floor space of at least 30,000 sq ft, but the stagnation we have talked about will likely continue for at least the next 12 months, as a lot of those occupiers have two or three years left on their current leases, and will not have to make any decisions for at least a year.”

Meanwhile, in Edinburgh property consultants are hoping that a large number of contract terminations and lease breaks due within the next three years will resurrect appetite for office space in the capital.

Research from Jones Lang LaSalle and Montagu Evans shows that 1.45 million sq ft of office space is likely to be renegotiated between now and 2014.

There are hopes this could force companies to act early to snap up available space in existing developments such as Tanfield and in the forthcoming HI Development, which is key to funding the extension of the Edinburgh International Conference Centre.