'Significant' office letting activity bodes well for Scotland's two largest cities

Scotland’s two biggest cities have seen “significant” office letting activity in the second quarter amid predictions of a further recovery as people eventually head back to their workplaces.

Take-up for the Glasgow office market totalled 118,628 square feet in the period from April to June, which is an increase of almost 60 per cent from the first quarter of 2021, and 94 per cent up from the same period in 2020 when the first lockdown hit the market hard.

There was also 119,973 sq ft of lease regears in the second quarter of this year, with many office occupiers happy to remain in Glasgow and committing to space within the city, according to latest figures from commercial property advisor CBRE.

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The biggest deal of the quarter in the city was at 200 Renfield Street, with Instant Offices, care of DWP, taking 35,787 sq ft across two floors. This was a building which CBRE subsequently purchased on behalf of a client, MRP.

Glasgow saw more pre-let activity take place at 177 Bothwell Street during the second quarter.
Glasgow saw more pre-let activity take place at 177 Bothwell Street during the second quarter.

There was also more pre-let activity at 177 Bothwell Street with BNP Paribas letting 20,600 sq ft in a deal in which CBRE advised on.

Andy Cunningham, senior director at CBRE in Glasgow, said: “Glasgow’s office market continues to bounce back strongly as Covid-19 restrictions across the country are eased.

“The 118,628 sq ft that transacted in the last quarter represents the largest amount of office take-up witnessed in the city since the start of the pandemic and demonstrates how confidence is returning.

“We are also aware of over 1.3 million sq ft of active requirements in the market which further emphasises Glasgow’s ability to make a strong recovery as people eventually return to the office.”

He added: “Looking ahead, landlords will need to adapt to the new, more flexible ways of working coming over the horizon, with hopefully a full return to work in Scotland sometime in August/September.

“There needs to be greater collaboration between landlords and tenants to help entice staff back to the office, with better services and amenities on offer.”

In Edinburgh, office take-up totalled 158,367 sq ft in the second quarter. This is a 77 per cent increase from the previous quarter and a 489 per cent jump against the year-on-year figure.

While take-up is still down on the five-year average, the second quarter is 49 per cent up from the pre-pandemic levels of the closing quarter of 2019 and is expected to improve even further with a “large number” of deals remaining under offer.

The most notable deals include the 61,237 sq ft assignation of 20 West Register Street from Baillie Gifford to FNZ as well as a letting to the Nursing and Midwifery Council, which has taken 11,353 sq ft of space at 10 George Street.

Beverley Mortimer, an associate director from CBRE in Edinburgh, said: “There was a marked increase in the number of deals which concluded in the second quarter of 2021, highlighting that occupiers are getting ready to return to the office. We are also continuing to see occupiers reassessing their space requirements as a blended style of working will play a role for some moving forward.”

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