Edinburgh and Glasgow office markets hold up - latest CBRE report

Glasgow has seen the highest level of office lettings take-up in more than a decade while Edinburgh’s investment levels have pushed ahead of the long-term average, according to a new report.

Alistair Urquhart, associate director at CBRE. Picture: Contributed

Property consultancy CBRE said office take-up in Scotland’s largest city during the third quarter of 2019 had been “exceptionally strong”, totalling just over 352,000 square feet – the highest level of Q3 take-up in more than ten years. It brings the year-to-date total to 611,712 sq ft.

The Q3 figure was flattered by the letting of 272,858 sq ft at One Central on Argyle Street by JPMC – the only deal from the quarter to surpass 10,000 sq ft. Of the remaining 24 deals, more than half were under 5,000 sq ft.

Alistair Urquhart, associate director at CBRE, said: “The Glasgow office market performance for the third quarter was exceptional, with JPMC’s acquisition at One Central significantly increasing take-up.

The Aberdeen figures included the letting of 51,356 sq ft at B3, Aberdeen International Business Park, to Oceaneering. Image: Contributed

“The deal is fantastic news for Glasgow, especially so soon on the back of the recent Barclays deal at Buchanan Wharf.”

He added: “Overall, demand for office space in Glasgow remains high, and we are optimistic for a strong end to the year, with the total take-up for 2019 expected to bypass the five-year average of 700,974 sq ft following the strong Q3 performance.”

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In Edinburgh, office take-up reached 134,274 sq ft in Q3, bringing the total for the year to date up to 497,668 sq ft and the 12-month total to 703,771 sq ft.

The firm noted that the capital also continued to prove popular with investors attracted by the city’s “market dynamics”. Office investment volumes for the year to date are said to be “materially ahead” of the long-term 12 month average.

Alistair Wright, associate director in CBRE’s Capital Markets team commented: “2019 has been dominated by international capital but it is encouraging that in Q3 we have witnessed UK capital activity in the acquisition of Causewayside House and Broadway Park. Whilst traditionally Q4 has witnessed a rush of activity, we anticipate this to be limited until negotiations between Westminster and the EU are progressed.”

Aberdeen, meanwhile, saw third-quarter office take-up total 122,770 sq ft, which included the city’s largest deal in three years with the letting of 51,356 sq ft at B3, Aberdeen International Business Park, to Oceaneering. It represents an increase of 27 per cent when compared to the 96,819 sq ft transacted for the same period in Q3 2018.