SE moves to boost Grade A offices

SCOTTISH Enterprise is looking at intervening in Glasgow’s commercial property market amid fears that a looming shortage of quality office space in the city centre may hamper efforts at attracting and retaining large firms.

The enterprise agency is researching ways to get over the city’s diminishing supply of Grade A office space, which experts believe could run out over the next six-to-18 months.

With only one development under construction, and few in the pipeline, there are concerns about the long-term outlook for attracting large private sector companies to the city. Multinationals in particular are often unwilling to commit to second-rate Grade B space. According to research from Colliers International, the availability of top quality office space is at a three-year low.

A spokesman for SE said: “It is critical that Scotland sustains a strong and competitive business environment to attract investment and encourage growth in our economy. We recognise that the current financial climate poses some issues, in particular for the provision of speculative Grade A office space in our cities, and so are undertaking some research to assess the scale of the issue and ascertain whether there are ways in which Scottish Enterprise can, if needed, provide support.”

David Peck, who last week took over as chairman of the Scottish Property Federation, said banks were still unwilling to back speculative property developments even in cities where there is demand. “Glasgow is going to reach a point where there is going to be very limited Grade A stock available and yet it’s a provable statistic that it has always needed a sensible supply of available accommodation to attract inward investment and without that it just won’t come.”

Guy Grantham, a director for research and forecasting with Colliers International, said: “The Grade A vacancy rate stands at its lowest level for three years and with only very limited supply coming to the market over the next 12 months and despite modest demand, we would expect that figure to continue to see significant falls throughout 2012.”