Strong outlook for Glasgow’s office market after pace picks up in Q3

Momentum in Glasgow’s office market has “significantly" increased over the past three months, with activity expected to remain healthy across all sectors for some time, according to new research.

Take-up in the city centre in the third quarter of the year was 250,659 square feet, which was up a “whopping” 66 per cent on the ten-year average, according to UK commercial real estate agent Avison Young.

It added that for out of town, there was similar substantial demand with a take-up of 131,960 sq ft, which was up by 61 per cent on the ten-year average.

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Avison Young said the increase comes as occupiers reassess their office needs and target appropriately sized and flexible spaces, introduce hybrid working styles, and look to improve the overall quality of the workspace ahead of a full return to the office in the coming months.

Avison Young flags its involvement in 'significant' landlord pre-lettings in Q3, including at sustainable office building Cadworks. Picture: McAteer Photograph.

The firm also predicts that the total year’s city-centre take-up will likely reach circa 550,000 sq ft, close to the ten-year average of 661,000 sq ft. It added that this is “exceptional” considering the full lockdown for most of the first half of 2021.

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Avison Young added that it was involved in some major landlord pre-lettings in the third quarter. It said The Student Loans Company secured 75,000 sq ft on the last building at Drum’s place-making project on Glasgow’s waterfront, Buchanan Wharf, and at Cadworks, “Glasgow’s most sustainable office building”, where the first tenant, TLT Solicitors, signed on the top floor. Further pre-lets during the quarter were at 177 Bothwell Street, involving BNP Paribas, Aecom, CBRE and Atkins at 2 Atlantic Square.

When such office developments are completed, they are will bring about 200,000 sq ft of new Grade A accommodation to the market, Avison Young also stated, but it expects this to let quickly as current occupational demand continues to outstrip supply, with roughly 500,000 sq ft of immediate requirements looking for accommodation.

Paul Broad, director and head of business space, Scotland, said: “As our markets begin to fully open up, we predict that there will be a further increase in activity and a rapid evolution of ‘the office’ in Glasgow, across Scotland and the UK.”

Buoyant

Also commenting was Alison Taylor, MD of Avison Young, Glasgow, who said: “We expect activity to remain buoyant across all sectors of the market for some time as many occupiers, who have pledged to commit to the UK’s 68 per cent carbon reduction commitment by 2030, realise they cannot necessarily accomplish this in their existing office accommodation. Avison Young expects many occupiers looking to relocate to seek out environmentally friendly offices.

“[We are] also seeing occupiers shed surplus accommodation, leaving fully fitted opportunities for others. We are seeing this sort of fully fitted accommodation let up quickly, with new opportunities coming to market all the time.”

She cited serviced office provider Landmark in the third quarter of this year deciding to exit some legacy properties across the UK, including a 25,000 sq ft, fully fitted, furnished, and cabled office space at 2 West Regent Street. “This space will be attractive to occupiers seeking shorter-term occupational deals or provide an attractive proposition for flex operators to use as an opportunity to enter the Glasgow market.”

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