Prime office shortage reshapes Scotland’s city markets

Office demand is rising again, but only for a narrow slice of the market.

Atrium Court in Glasgow | Creative Commons

Scotland’s office sector is tightening at the top end, with occupiers competing for a limited pool of prime, city centre space.

Data from property data firm CoStar shows a growing mismatch between overall availability and what businesses actually want, with demand concentrated in modern, high-specification buildings.

Take-up is strengthening, particularly in Glasgow, where more than 300,000 sq ft was let in the first quarter.

Average deal sizes have risen sharply in recent years, signalling a return of larger occupiers and more decisive commitments to space.

Recent transactions underline the trend. Shawbrook Bank and Sky have each taken more than 26,000 sq ft in central Glasgow, while EY has secured around 36,000 sq ft in Edinburgh at Haymarket Square.

In Aberdeen, lettings at Marischal Square highlight continued demand for quality space tied to GB Energy.

Despite this activity, supply remains constrained.

New development is limited, with construction pipelines well below historic norms as viability challenges continue to stall schemes.

Grant Lonsdale, senior director of market analytics at CoStar Group, said the reality at the top end of the market is stark: “There’s been a narrative since Covid that offices are empty everywhere, and that is still true in parts.

“But when you narrow it down to the very top end, there’s actually very little available. In Glasgow and Edinburgh, if you’re a larger occupier looking for around 10,000 sq ft, you can pretty much count the options on your fingers.”