The number of office lettings to complete in the city centre in the first three quarters of 2022 reached 84, according to the latest research from Savills. This represents the greatest number of deals seen at this point of the year since the firm’s records began in 2013. The next best year was 2019, which recorded 82 deals over the same period. Total quarter one to quarter three activity this year amounts to some 306,000 square feet of office space.
Property experts said the increased activity has seen occupiers prepared to pay higher rents in exchange for well designed, energy efficient space already fitted out and including furniture to allow occupiers to move in immediately. The majority - some 65 per cent - of deals in 2022 involve sub-3,000 sq ft floorplates. Savills said occupiers were choosing the most efficient options - higher quality, smaller offices.
The level of demand has seen refurbished “Grade B” offices that offer smaller floorplates letting well, with deals at 24 St Vincent Place, The Ink Building and The Beacon highlighting this trend, Savills added. Rents on this style of small refurbishment are now achieving up to £30 per sq ft with headline rents for new “Grade A” offices about to reach £36 per sq ft.
Colin McGhee, office leasing director at Savills Glasgow, said: “Average rents are strengthening as occupiers continue to show demand for well designed, fit-for-purpose offices. This weight of demand is unlocking potential to re-purpose tired and redundant offices, by cutting up floorplates to provide for a range of business sizes. Occupiers want flexible lease terms and ‘easy in’ solutions and landlords who deliver this space are being rewarded with strong leasing activity.”
The firm said Glasgow continued to be attractive to a wide range of occupiers. During the first nine months of the year, 42 per cent of the letting activity came from the finance, professional services and technology, media and telecoms (TMT) sectors. Savills began recording office activity in Glasgow in 2013.