As a commercial property developer, my natural instinct whenever I go into a city is to look up – you really can tell a lot about its economic health by counting the cranes in the skyline.
Glasgow is one city that is witnessing a significant “purple patch”, with large occupiers, including Barclays, Morgan Stanley, HMRC and Clydesdale Bank, choosing to expand in the city. As a result, confidence in the market is soaring.
In fact, the entire Scottish office market is growing, attracting more than £1 billion of investment last year alone. While Edinburgh and Glasgow account for 70 per cent of investment in the sector, Glasgow’s popularity in particular is causing an emerging shortage of large floorplate office space.
At Highbridge Properties, we have developed out more than 13 million square feet of employment space across the UK, with our exemplar scheme being Cobalt Park – the largest office park in the UK, comprising some 2 million square feet and bringing 14,000 jobs to the area. The site has drawn significant employers to the region including Accenture, Santander and EE.
Earlier this year we concluded the largest office letting ever in the UK’s north east when we secured Sage to take 200,000 sq ft of space at Cobalt Park.
Several years ago, Highbridge saw the same huge potential from making a major investment in the Glasgow office market. Our development Magenta, in partnership with Clyde Gateway, is a 20-acre urban business park, positioned on the River Clyde, only two miles from the city centre and well-connected by rail, road, cycle and walking routes to the city centre and outlying commuter towns.
It has already proved to be a great success. The first speculative building, Red Tree Magenta, was fully let as soon as it was completed. It is home to 30 occupiers and has brought 170 jobs to the area.
With such keen demand for office space in the city, there is now an increasingly limited supply of high-quality, large floorplate options. According to a Grant Thornton research report, there are currently only seven buildings in the city centre that are capable of providing more than 1,858 square metres with floors larger than 929 sq m. Importantly, the wider Magenta development is one of the very few in Glasgow that has further capacity for large floorplate office accommodation that the city so desperately needs.
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Access to a diverse range of skills is vital to harnessing real business growth and Glasgow has this in spades. The city has some of the best universities in the country and the good news is the talent is staying put, with one of the highest graduate retention rates of all UK cities at 46 per cent. Significantly, there is a plentiful and highly skilled labour pool. Within the Magenta commuter catchment alone, there are a staggering 954,514 people of working age to draw upon, representing 67 per cent of the total population. The sheer diversity of talent is incredible.
The growth of financial services and professional services in Scotland is also having an impact on the office sector and Glasgow is particularly dominant with the insurance and accountancy industries. Over the past 20 years, gross value added in Glasgow from financial and professional services has increased by 136 per cent.
New areas of growth are also emerging in the city, in particular in the professional, scientific and tech industries, which have enjoyed nearly 20 per cent growth over the past five years and a further 4,000 jobs in these industries are projected for the years to come.
The face of the city is changing and Glasgow is quickly accelerating to the top of the wish list for UK businesses and investors alike – attracted by the city’s diverse economy and strong occupational market dynamics.
The outlook for any business choosing to locate to or expand in Scotland’s largest city looks very bright.
Guy Marsden is a founding director of Highbridge Properties PLC