Glasgow office market riding high after record quarter

An architectural image of Barclays' new campus at Buchanan Wharf. Picture: Contributed
An architectural image of Barclays' new campus at Buchanan Wharf. Picture: Contributed
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Glasgow has notched up a record quarter for office property deals, with city centre occupier take-up exceeding one million square feet for the year to date, new figures have revealed.

Total take-up reached 614,466 sq ft between July and September, spread across 31 deals, according to commercial property consultancy JLL.

The record quarter for office transactions brings the city centre’s total take-up for the year to date to 1,192,689 sq ft with just under three months of the year still remaining. In contrast, office occupier take-up for the whole of 2017 amounted to 627,313 sq ft.

JLL said that the bumper quarter was thanks in large part to banking giant Barclays, which redefines the city centre parameters to cross the river Clyde.

In the largest deal of the quarter, and the year to date, Barclays took a 470,000 sq ft pre-let at Buchanan Wharf. Other notable deals in the city included 60,000 sq ft take-up at 123 St Vincent Street, and Glasgow School of Art and CXP Limited both signing new deals for more than 10,000 sq ft of city centre space.

In the first six months of 2018, take-up of city centre office space amounted to 578,223 sq ft, which was already boosted by notable major pre-let activity to HMRC at Atlantic Square, and Clydesdale Bank’s 110,955 sq ft pre-let at 177 Bothwell Street.

JLL noted that it had been involved in four of the top five largest deals in the year to date, and almost a third of all transactions in the past quarter.

The firm said a sustained increase in take-up continued to place “constraints on supply”, with vacancy rates decreasing from 6.92 per cent in the second quarter to 6.89 per cent in the third, with a new-build vacancy rate at just 0.21 per cent.

According to JLL, with new occupier enquiries also increasing, from 43 to 60 in the third quarter, Glasgow’s office market is continuing to attract activity and “proving itself to be a desirable location for business to operate”.

Alistair Reid, director at JLL, said: “With total take-up already exceeding one million square feet, we anticipate that 2018 will be the best year for office take-up in Glasgow in recorded history.

“While the landmark Barclays deal has been a major contributing factor to Glasgow’s bumper Q3, it should not obscure the strong performance of the city’s office market during the course of the year.

“From larger corporates and government departments to SMEs [small and medium-sized enterprises] and fintech firms, requirements and new enquiries for city centre space remain strong. It’s inevitable that this demand will continue to impact supply, but with three new speculative developments in the offing, there is at least a pipeline of new build supply further down the line.”