finance

Scotland sees first signs of change in office strategy



Office space take-up in Scotland’s biggest cities has slowed, with signs that companies are shifting strategy as pandemic work trends solidify, according to Avison Young.

The property advisor’s latest report showed that after a strong finish to 2021, activity in Edinburgh city centre slowed slightly, with take-up amounting to 95,543 square foot (sq ft) in the first quarter of this year.

However, this equated to a 28% increase compared to the same time in 2021, when the country was in lockdown.

Meanwhile in Glasgow, total take-up during the first three months of this year in the city centre was 82,270 sq ft – an increase of 34% year-on-year.

Edinburgh’s city centre take-up amounted to 95,543 sq ft, while out-of-town take-up amounted to 21,587 sq ft.

A total of 40 transactions were completed during the first quarter, which was nearly double the 21 transactions completed in the first quarter last year.

Only three deals during the quarter were for more than 10,000 sq ft, with 1 Haymarket Square continuing to be a popular location, with the site seeing the largest deals of the quarter.

Peter Fraser, director at Avison Young Edinburgh, said: “While activity slowed in the capital after an extremely strong finish to 2021, the office market is in a much better place than this time last year.

“While staff are on the way back to the office in ever increasing numbers, we know from our conversations with many occupiers that the hybrid workplace is here to stay.

“A lot of businesses are beginning to downsize and provide greater weighting to the quality of the space to ensure staff are happy in their working environment, as we saw in the latest quarter where only three deals over 10,000 sq ft completed.”

He added: “Facilities like wellness spaces and changing facilities have increased in importance, with the intention of making the office more of a destination rather than just a workspace.”

As for Glasgow, city centre take-up amounted to 82,270 sq ft in the first quarter, which equated to a 5% decrease on the previous quarter. Out of town take-up was 50,544 sq ft – down 32% on the previous quarter.

Activity was led by the professional services sector, which accounted for almost 90% of city centre take-up above 5,000 sq ft.

The vacancy rate in Glasgow city centre has increased slightly since the previous quarter and now sits at 10.6%

The majority of Glasgow’s development pipeline is let already, with only circa 100,000 sq ft of new Grade A space still available.

Alison Taylor, managing director of Avison Young Glasgow, said: “The expansion of flexible space in the city is welcome given the number of smaller office requirements being witnessed at present. It’s important as a city that we can give fledging companies space to grow.

“At the same time, with the development pipeline eroding, the city is crying out for the next phase of speculative offices to satisfy those companies strategising for best-in-class space.“

She added that Clearbell’s acquisition of 150 St Vincent St in December is “not only a display of investor confidence in the city, but will transition a 1970’s envelope into an inspiring new sustainable workspace of the future“.

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