Glasgow's office market recovering after more firms look to upgrade

The number of tenants signing leases has outpaced the number of offices becoming vacant in central Glasgow for the first time since the commercial property market collapse during the recession.

According to Colliers International, which produced the report, Glasgow is one of the first cities outside London to experience a recovery in the office market.

It has been fuelled by firms upgrading to better offices while landlords are still offering favourable incentives. The market has also been aided by the fact that no new premium or "grade A" developments are due to complete in Glasgow until 2013 at the earliest.

Guy Grantham, director for research and forecasting at Colliers, said: "There is still competitive pricing so a lot of people are thinking: 'let's upgrade at a discount.'

"It helps them to keep up with the Joneses."

Renewed demand for prime sites has driven headline rental prices up 10 per cent so far this year, Grantham said.

Peter Leburn, head of offices in Glasgow at Colliers, said Glasgow is outpacing other Scottish cities due to its mix of tenants.

"Glasgow has always been more diverse than Edinburgh, which is very financially based," he said.

However David Smith, regional director at Lambert Smith Hampton, warned the recovery is only in the premium properties.

"We are seeing a two-tier market. If you're a landlord with poorer quality or smaller stock - that market has not recovered."