Avison Young: Glasgow and Edinburgh city centre offices see highest take-up in over 18 months

Avison Young: Glasgow and Edinburgh city centre offices see highest take-up in over 18 months

Paul Broad

Strategic real estate advisor Avison Young has released its latest quarterly Big Nine office market update, revealing that Glasgow and Edinburgh city centre offices have experienced the highest take up in over 18 months.

Total take-up during Q2 in Glasgow city centre was 142,821 sq ft – down 13%on the ten-year average, but the highest since the beginning of 2020. Meanwhile, Edinburgh city centre saw the largest number of deals since Q4 2018, with take-up amounting to 137,705 sq ft – only marginally down on the ten-year average by 4%.

In Glasgow, the city centre recorded the highest level of take-up since Q1 2020, which amounted to 142,821 sq ft. Out of town take-up was 34,497 sq ft.



Flexible workspace deals are returning to the regional markets and accounted for the largest deal of the quarter in Glasgow: 35,787 sq ft to Instant Managed Offices Ltd c/o DWP at 200 Renfield Street.

BNP Paribas has taken the 20,700 sq ft first floor of 177 Bothwell Street at a headline rent of £34.50 per sq ft.

The top floor of Cadworks (10,000 sq ft) is under offer and 20,000 sq ft is under offer at 2 Atlantic Square. Both deals are expected to conclude in Q3.

There remains a healthy level of new requirements, with the UK Government Cabinet Office looking for between 20,000 sq ft and 40,000 sq ft, engineering company Aecom requiring 25,000 sq ft and power supplier Aggreko looking for 15,000 sq ft.

Grade A space within the city remains at a premium with only 6,500 sq ft currently on the market, but just over 200,000 sq ft of speculative new build accommodation will complete in Q3 and Q4 – much less than current occupational demand requirements.

Paul Broad, director at Avison Young Glasgow, said: “Office occupiers are on the move in Glasgow and there is a clear appetite to reshape and reconfigure office occupation in the city. While there is still some uncertainty over space requirements many occupiers are looking to hybrid styles of working which will rely heavily on improved technology for meeting solutions, virtual reality, etc. It’s an extremely exciting time to be leading an office agency business, seeing all the new innovations.

“However, there continues to be a divergence of views on the extent to which workers will return to the office, ranging from a complete return to a fully flexible working policy. As a result, flexible workspace deals are returning to the regional markets and accounted for the largest deal of the quarter in Glasgow, and we expect to see a further increase in activity once the Scottish Government announces a return to office working.”

In Edinburgh city wide office take-up totalled 153,992 sq ft with 137,705 sq ft recorded in the city centre – only marginally down on the ten-year average by 4% and the largest number of deals since Q4 2018. The out-of-town market saw 32,131 sq ft of take-up.

The largest deal of the quarter was an assignment to fintech company FNZ of 20 West Register Street from Baillie Gifford, who originally pre-leased the building.

The public sector has been the most active sector this year after the Nursing and Midwifery Council took 11,353 sq ft at 10 George Street, and Scottish Ministers acquired three floors at 20 West Register Street (28,728 sq ft).

Availability in the city centre has been slowly increasing since its cyclical low two years ago. This is more a reflection of the completion of new buildings such as Capital Square (54,398 sq ft vacant) rather than occupiers flooding the market with surplus space post Covid19. However, given the level of demand and constrained development pipeline moving forward we anticipate a number of pre-let announcements in the coming months.

The out-of-town market is starting to see more activity following a lacklustre 12 months and is expected to see an improvement in requirements later in the year due to the lack of availability in the city centre.

Avison Young: Glasgow and Edinburgh city centre offices see highest take-up in over 18 months

Peter Fraser

Peter Fraser, director at Avison Young Edinburgh, added: “With occupiers focussing on their Return to Office strategies, the central-Edinburgh office market has really started to pick up. We saw an extremely healthy level of activity during Q2, with the highest volume of deals in two and a half years. There has been a big increase in enquiries and viewings in recent months, as well as a number of pre-let discussions.

“The general focus is on prime and well refurbished accommodation – a clear indication that occupiers are concentrating on best-in-class buildings and ESG matters as they look to encourage their staff back to the office following the past 18 months of home working.

“While the Public Sector has been the most active sector so far this year, it’s clear that the private sector is on the move too. The largest deal of the quarter was an assignation to financial services company FNZ of 20 West Register Street.

“Despite Out-of-Town activity remaining slow in the first half of the year, we see prospects improving sharply as we approach the end of the year – in part driven by the lack of larger floorplates and rising rents in in the city centre, but also as a number of building refurbishments are due to complete in the area. All in all, it’s clear that things are now looking much brighter in Scotland’s capital.”

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