By Kristy Dorsey

Glasgow’s historic shortage of Grade A office space has not eased even though the pandemic has brought about huge changes in working patterns, a new report has found.

Global estate agency Savills said the city continues to have one of the most acute shortages of available office accommodation of all the UK’s “Big 6” regional cities. With less than six months of Grade A supply in Glasgow, only Leeds has less availability.

By comparison, those with the greatest availability – Manchester, Cambridge and Edinburgh – have more than a year of Grade A supply.

Office take-up in the first half of this year in Glasgow totalled 378,770sq ft, Savills said, exceeding volumes in the first half of 2019 by 18 per cent. The firm expects total take-up to reach approximately 500,000sq ft by the end of this year.

David Cobban, head of Savills’ Glasgow office, said the level of supply relative to average annual uptake demonstrated a “critical” need for more speculative office development.

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This even though huge numbers of Scots will continue working from home for months to come following the announcement earlier this week that tighter restrictions are being enforced to control the spread of the coronavirus.

While working from home has remained the default position in Scotland since lockdown began, the UK Government had, until earlier this week, been encouraging employees in England to return to their places of work. Announcing the U-turn on this policy on Tuesday, Prime Minister Boris Johnson said this and other measures “could” be in force for up to six months.

“Since 2018, Glasgow has seen some of its strongest ever take-up, and although Covid-19 has caused this to slow, there is still a significant level of demand in the city,” Mr Cobban said.

“The disruption in the market hasn’t reduced the number of requirements, but rather the size of requirements, which will likely reduce the quantum of demand in the short-term. Despite this, the city’s development pipeline presents a strong opportunity for rental growth, and while the current headline is £32.50, we are expecting to see lettings complete at rents in excess of this when construction allows.”

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Acknowledging the ongoing requirement to work from home wherever possible, Savills said a cultural shift is taking place towards greater flexibility between office and home working in the future.

Of those workers in Scotland questioned by the firm, 61% said they would like to spend at least two days a week working from home when lockdown measures are lifted. That compares to 19% pre-lockdown.

This chimes with findings from a similar survey published earlier this week by legal firm CMS, which questioned nearly 200 business leaders in Scotland about their intentions going forward.

Although 24% said they would be downsizing their office requirements, more than half – 52% – said they had no plans to scale back. Nearly one in five said they expect to split their offices into different locations.

Steve Lang, a director in the research team at Savills, said it seems likely that occupiers will need the same size of space in the future, but they will use it in new and different ways.

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“The Covid-19 pandemic has upended normal life in countless ways, not least the switch from commuting to the office to working from home,” he said.

“What this huge home working experiment has taught us is not that the office is dead – far from it – but that its role needs to adapt. Where office design used to be all about desk space, new working patterns mean organisations will need flexible spaces focused on collaboration and team-building.”

The return of office workers in some form is regarded as vital to the economic recovery of the UK’s city centres, where a lack of footfall has left shops, cinemas, hotels, bars and restaurants struggling to generate sufficient volumes of trade.

Stuart Patrick, chief executive of the Glasgow Chamber of Commerce, has warned that the situation is “stark” with city centre shops reporting around 50% of their year-on-year trade levels.