While the pandemic continued to impact take-up activity during the final three months of 2020, the outcome was not as bad as expected.
Stewart Taylor, head of the Scottish office agency business at property consultancy CBRE, said: “Whilst take-up of office space has reduced in Glasgow and Edinburgh, it is in line with the pattern we’re seeing across the UK.
“In light of the temporary withdrawal of most occupiers from the market for nine months, unless triggered by a lease event, it’s a much better outcome than most commentators were expecting in the summer.
“After the initial shock of Covid and some sceptics citing the end of the office as we know it, evidence is actually pointing towards a strong bounce back with the vast majority of occupiers concluding that a return to some form of blended working will be the new normal and they want that to be in high quality office space.”
The firm’s latest research showed that over the final quarter of 2020, office take-up in Edinburgh totalled 103,444 square feet, which is only a 2.5 per cent decrease from the same period in 2019 despite the challenging economic climate.
This brings the total take-up for 2020 to 576,927 sq ft, just 4.3 per cent down on 2019 and 27 per cent below the five-year average.
There were 91 lettings in the past year in Edinburgh compared with 149 in 2019, the largest of which was the 280,000 sq ft pre-letting at Haymarket, with Baillie Gifford committing its future to the development.
Other notable deals included Arup taking two floors at 10 George Street, equating to 20,000 sq ft, People’s Energy letting 17,500 sq ft at Shawfair and the Financial Conduct Authority taking 16,000 sq ft at Quayside House.
Beverley Mortimer, associate director from CBRE in Edinburgh, said: “As the dust settles, it’s clear that Edinburgh weathered the storm significantly better than was expected, buoyed without question by the pre-letting of 280,000 sq ft at Haymarket. In summary, it’s a remarkable result considering the market conditions.”
Take-up for the Glasgow office market totalled 108,069 sq ft during the final quarter of 2020. While this is a 65 per cent drop from the same period in 2019 and 55 per cent down on the Q4 five-year average of 244,178 sq ft, it is up almost 25 per cent from Q3 2020.
There were 86 deals over the year in Glasgow, down from 2019’s total of 169, however seven of these lettings surpassed the 10,000 sq ft mark.
Andy Cunningham, senior director at CBRE in Glasgow, said: “2020 can best be characterised as the year when everything changed. However all markets across the UK have been impacted by Covid so these numbers should not alarm.
“Whilst we expect take-up levels to remain below trend in 2021, small deals and those driven by lease events are still likely to progress, with larger deals most likely to be impacted.”