Edinburgh and Glasgow office markets distorted by weak supply of 'best-in-class' options
New figures from property consultancy JLL show that a total of just over 280,000 square feet of office space was transacted in Edinburgh in the first six months of 2023 - down on the first-half ten-year average, which the firm attributes to a weak supply of “best-in-class” options. As a result, an increasing number of landlords are looking to attract tenants by refurbishing existing space to improve the building’s sustainability features and create high-quality amenities.
Despite this, baseline demand is said to have remained resilient, with some occupiers in the capital opting to upsize during the first half, including a 28,000 sq ft leasing at 2 Freer Street to Analog Devices.
In Glasgow, while overall take up was also down compared to the first-half ten-year average, at 277,411 sq ft, the number of transactions remained consistent with previous years. With no new-build developments completing in the city until 2025 at the earliest, best-in-class refurbishments are filling the gap, JLL noted, with new figures showing that 70 per cent of all deals completed in Glasgow over the past 12 months included elements of fit out. Just as in Edinburgh, however, demand in Glasgow remains buoyant, with a number of deals under offer expected to bolster take up for the rest of the year.
Alex Mackay, associate director at JLL in Glasgow, said: “The lack of available Grade A space in Glasgow is well reported, and we are starting to see this reflected on the market as occupiers chase a diminishing supply of the best space. In response, we’re likely to see an increased focus among landlords on environmental credentials and high-quality building amenities, with the gap in quality between the best-in-class assets and the wider market reinforced by latest headline rents set for the city.”
Hannah Done, associate director at JLL in Edinburgh, added: “Deal numbers remain slightly below the first half average in Edinburgh - yet with an increasing number of high-profile firms across the UK mandating that employees return to the office, we expect transaction levels will maintain an upward trajectory in the months ahead.”
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