DEMAND for office space has plunged in Scottish cities in the latest quarter amid the Covid-19 coronavirus crisis but experts have welcomed signs that market conditions have started to improve in recent weeks.

Property consultancy CBRE found the take up of office space fell dramatically in Glasgow, Edinburgh and Aberdeen in the three months to June, during which lockdown restrictions and concerns about the economy weighed on the market.

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CBRE found the number of deals completed in all three cities fell to a record low in the quarter.

However, Edinburgh was hit particularly hard.

Take up of office space fell by 84 per cent in the city in the second quarter compared with the same period last year.

Take up in Glasgow fell by 67% annually in the quarter. It was down 69% in Aberdeen.

Stewart Taylor, head of CBRE’s Scottish office agency business, said the figures were unsurprising, particularly as buildings couldn’t be viewed or surveyed during the quarter.

However, noting indications that interest has increased following the easing of some lockdown measures, he expressed confidence that office space would remain in demand although home working has become the norm for many.

“If anything, activity was actually better than expected,” said Mr Taylor. “What has been encouraging is that despite an industry-wide debate on how we will work in the future, occupiers have continued to progress acquisitions and the last three weeks have seen a marked increase in the speed at which negotiations and deals are progressing.”

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Mr Taylor added: “While offices in the future may look different and may be smaller than anticipated at the start of 2020, the desire to have an office base remains and in fact much of what we’re seeing is simply an acceleration of trends that were already occurring - a flight to the best quality space with the best wellness credentials.”

CBRE said the pandemic had delayed completion of new office developments within Glasgow, further tightening the squeeze on city centre Grade A space.

Activity in the investment market also slowed in Scotland during the second quarter.

Steven Newlands in CBRE’s Investment team, said: “We expect transaction volumes to increase in the third quarter as we exit lockdown and then accelerate further in the fourth quarter of the year.”