Office take-up in Edinburgh totalled 294,441 sq ft in the final quarter of 2021. This is up 101.8% from the previous quarter and 77.7% against the Q4 five-year average. It brought Edinburgh’s total take-up for the year to 688,238 sq ft. Whilst this is below the five and ten-year average, it is a return to the pre-pandemic level of 2019.

The city centre new Grade A vacancy rate totals just 0.69% with an extremely limited supply on the horizon. There were also notable sub-lettings with User Testing taking 13,682 sq ft at Exchange Crescent and Unity Technologies acquiring 8,950 sq ft at Capital House with CBRE acting on its behalf.

Angus Lutton, surveyor from CBRE in Edinburgh, said: “The importance of ESG credentials is now paramount to occupiers and is driving their real estate decision-making. The current trend is being led by large multinational companies, but we expect this to trickle down to all occupiers moving forward as they set their net-zero targets. This will put further pressure on landlords to look at building performance to make sure it is in line with ESG requirements. We continue to see occupiers put staff wellbeing at the top of their list of necessities as they seek to offer the best possible working environment for their staff. Again, this is a trend which has been accelerated by the pandemic.

“Moving forward for the coming year we hope to see a gradual return to the office. This will allow companies to understand how they will work in a post pandemic world and solidify their space requirements.”

Take-up for the Glasgow office market totalled 115,825 sq ft in the final quarter of the year, which is down from the previous quarter but up 33.5% against the same period in 2020, a recovery much stronger than many of the other UK cities.

A total of 42 lettings took place across the quarter, with the biggest being another pre-let at 177 Bothwell Street; Transport Scotland took almost 50,000 sq ft at the new development in a deal that CBRE was involved in. Other notable deals included The Wise Group taking 6,667 sq ft at Templeton on the Green and Experian’s 5,249 sq ft letting at McLellan Works.

A total of 603,000 sq ft of office space was transacted across the year and whilst this is lower than the city’s long-term annual average, it indicates growing confidence in the city.

Martin Speirs, associate director from CBRE in Glasgow, said: “As 2021 drew to a close, Glasgow’s office market recovered strongly from the effects of the pandemic in 2020 and prospects for this coming year look even better. In fact, there is a real buzz around Glasgow at the moment as it illustrates just why it is such an attractive office location. As the eyes of the world watched on in 2021, Glasgow hosted COP26 effortlessly, proving to all the clear capabilities and infrastructure the city has in place to make sure that business, commerce and trade will always flourish within its boundaries.

“2022 is shaping up to be an exciting year with strong demand expected to continue, especially for the best-in-class buildings and those that can meet occupiers growing focus on ESG credentials.”

Office take-up in Aberdeen for Q4 was the strongest for the year, with 91,000 sq ft transacting across 14 deals between October and December. This represents a 77.3% increase from the previous quarter.

However, with Covid restrictions ongoing, Aberdeen has admittedly struggled to recover at a quicker pace than Scotland’s other big cities as many businesses continue to hold off making decisions on property strategy until measures are eased and the true impact of hybrid working is assessed. Coincidently, 118,000 sq ft of re-gears concluded within the year illustrating that many businesses are instead choosing to extend leases on the space they currently occupy in these uncertain times.

The total office space take-up for 2021 was 197,914 sq ft, which is 47% below the five-year average and Aberdeen’s lowest level of occupational take-up since CBRE records began. However, CBRE alone has in excess of 150,000 sq ft of transactions currently under offer that have slipped into 2022 so a strong start to this year’s take-up figure is expected.

Amy Tyler, associate director from CBRE in Aberdeen, said: “Whilst deal volumes and the space transacted are down across the year, there are still many reasons to remain optimistic about the office market in Aberdeen. There are signs that the city will soon enter its recovery phase as at present there is 300,000 sq ft in live requirements for office space in the city.

“COP26 being hosted in Scotland also demonstrated the importance of renewable and clean energy going forward, and there is perhaps no city better placed to embrace this change with Aberdeen already a leading figure in the development of sustainable energy. ETZ Ltd’s (Energy Transition Zone) commitment to a new 4,445 sq ft office at Blenheim Gate is a statement of intent for this next critical phase of the North East’s energy sector.”

Stewart Taylor, head of CBRE’s Scottish Advisory and Transactions business, commented: “If we had known twelve months ago that 2021 would be dominated by more restrictions and stop/start government guidance, we would have taken these results and headed for the hills.

“No one now thinks the office is dead. What we are seeing is an acceleration of arguably overdue change, with quality and sustainability at the core of decision making. These are a strong set of statistics and as we enter the new normal, we will continue to see a flight to quality and record rents being set in buildings owned by forward thinking investors.”