Office take-up at highest levels since financial crisis

Levels of office take-up in Glasgow city centre and Edinburgh out-of-town markets for the first quarter of the year are the highest since the economic downturn in 2008, according to commercial property consultants Bilfinger GVA.

The firm’s Big Nine report for Q1 of 2016 shows that city centre take up in Glasgow was at 288,987 sq ft, more than double the five year quarterly average of 143, 402 sq ft.

This figure was boosted by Morgan Stanley’s pre-let of 155,000 sq ft at HFD Property Group’s 122 Waterloo Street, the largest deal in the UK this quarter.

Alison Taylor, director and head of business Space in Scotland for Bilfinger GVA, said that the deal also opens the doors for further city centre development.

She said: “Now that construction has begun in Waterloo Street, there is potential to develop the adjacent 215,000 sq ft site at 177 Bothwell Street. Demand is high in Glasgow for Grade A offices so any additional space is quickly snapped up. Accountancy body ACCA has taken the remaining 55,000 sq ft in BAM’s 110 Queen Street development while only two and a half of the 11 floors remain available at One West Regent Street.”

Enquiries for out-of-town space in Glasgow have also increased over the quarter with the 86,282 sq ft take-up just above the five year quarterly average of 85,699 sq ft.

In Edinburgh it’s the out of town market that’s grabbed the headlines. It’s notched up the UK’s largest out-of-town deal with Napier University’s 107,000 sq ft acquisition at South Gyle Business Park to the west of the capital where Peter Fraser, associate director at Bilfinger GVA, says demand continues to outstrip supply.

He said: At the moment there is a significant amount of unmet demand for business park space in the capital at a time when stock levels are relatively low. In particular, there is now just over 50,000 sq ft available at Edinburgh Park, Scotland’s premiere out-of-town business park. With the prospects of any new speculative office development unlikely, this will undoubtedly lead to rent rises in the out-of-town market.”

Edinburgh’s city centre also turned in an impressive first quarter with American audio chip producer Cirrus Logic letting 55,000 sq ft at Quartermile 4 to push take-up to 178,696 sq ft from the five year quarterly average figure of 155,712 sq ft.