Signs of life in Scottish office market after lockdown plunge

Scotland’s office property market is starting to show “signs of recovery” after a plunge in lettings during the second quarter of the year.

Over the second quarter, office take-up in Edinburgh totalled just 26,876 square feet, an 84 per cent drop from the same period in 2019, according to the latest CBRE figures.
Over the second quarter, office take-up in Edinburgh totalled just 26,876 square feet, an 84 per cent drop from the same period in 2019, according to the latest CBRE figures.

Releasing its latest research showing huge falls in take-up in the nation’s three largest cities during the three months to June, property consultancy CBRE said the office sector had been scarred by the coronavirus outbreak.

Stewart Taylor, the firm’s head of Scottish office agency business, said: “The offices sector, along with every other sector, has not emerged unscathed from the Covid-19 pandemic. The figures are unsurprising, particularly as buildings couldn’t be viewed or surveyed.

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“If anything, activity was actually better than expected. What has been encouraging is that despite an industry-wide debate on how we will work in the future, occupiers have continued to progress acquisitions and the last three weeks have seen a marked increase in the speed at which negotiations and deals are progressing.”

Over the second quarter, office take-up in Edinburgh totalled just 26,876 square feet, an 84 per cent drop from the same period in 2019.

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This brings the take-up total for the first half of 2020 to 157,506 sq ft, which is 57 per cent down year-on-year and a further 68 per cent down against the five-year average of 488,218 sq ft.

With the lockdown having a huge impact on both the volume and size of lettings transactions, the second quarter witnessed a record low number of deals with just 11 completing between April and June.

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Angus Lutton from CBRE in Edinburgh said: “As you would expect, it has been a challenging quarter for Edinburgh. The low levels of take-up were entirely unsurprising and with no viewings, tenants didn’t have the option to consider new space, which is partly the reason for the relatively high number of lease re-gears.

“As we begin the third quarter we are already seeing an increase in activity as government lockdown measures are eased.”

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Take-up for the Glasgow office market totalled 61,305 sq ft during the second quarter, a 67 per cent drop from the same period in 2019 and 69 per cent down on the Q2 five-year average.

In the second quarter, take-up in Aberdeen totalled 32,847 sq ft, a year-on-year fall of 69 per cent. This brings the take-up total for the first half of the year to 211,293 sq ft, which is actually 42 per cent up on the first six months of 2019.

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Taylor added: “While offices in the future may look different and may be smaller than anticipated at the start of 2020, the desire to have an office base remains and in fact much of what we’re seeing is simply an acceleration of trends that were already occurring – a flight to the best quality space.”

Read More
Commercial property investment in Scotland hits brakes in April
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