THE Scottish capital’s office take-up declined sharply in the last quarter, while there was an increase in leases in Glasgow, new figures show.
Office take-up in Edinburgh totalled 87,168 sq ft in the second quarter, which was down 45 per cent from the same period in 2021 and down 65% against the five-year second quarter average of 251,458 sq ft.
However, despite the quarter’s downturn, the total take-up for Edinburgh for the year to date is described as a “healthy” 206,094 sq ft, according to CBRE.
Take-up for the Glasgow office market totalled 135,155 sq ft in the second quarter, which is up 9.6% from the second quarter of 2021, showing the market “continues to recover from the impact of the pandemic”.
Total take-up for the year to date in Scotland’s largest city stands at 230,651 sq ft, 16.5% up against the same period last year.
CBRE said Glasgow’s 12-month rolling average has increased, with 635,685 sq ft transacting in the past year, representing an increase of 61.88% against the previous year.
Glasgow had two deals in the past three months that surpassed the 20,000 sq ft mark, with Ovo Energy taking 33,905 sq ft at the recently complete Cadworks and serviced office providers WIZU letting 24,350 sq ft across three floors at 2 West Regent Street.
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There was more activity at ONYX on Bothwell Street with drinks manufacturer Diageo agreeing to let 12,438 sq ft across two floors.
Out of the 2.895m sq ft of office space currently available in the Glasgow market, only 134,194 sq ft of it is considered Grade A, representing just 0.59% of all the city's office stock.
Prime office rents in the city are set to surpass the current rate of £35.25 per sq ft by the end of the year.
Martin Speirs, associate director from CBRE in Glasgow, said: “We are entering an interesting time in the Glasgow office market with Grade A supply continuing to diminish and demand for best-in-class space remaining.
“Occupiers understand now more than ever the importance of having not only high-quality office space, but space that offers their staff, and their business, the focus on ESG that is being demanded at board level. The war for talent is becoming apparent and only with engaging and exciting office space will occupiers succeed in attracting and retaining their best staff, but also, importantly, manage to encourage them back into the workplace.”
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In the Scottish capital, with 789,275 sq ft worth of occupier requirements in the pipeline, space is “still in high demand”.
The quarter’s largest deal was at Exchange Crescent, with Dukosi taking 12,000 sq ft in a deal that CBRE was involved with. A lack of prime office space in Edinburgh is putting pressure on rents in the city. Current demand is pushing rents to £40 per sq ft, and the upward trend is expected to continue because of the lack of future development coming out of the ground.
CBRE said at present all under-construction office space in Edinburgh has already been fully pre-let.
Stewart Taylor, senior director, CBRE Edinburgh, said: “The recovery of the Edinburgh office market continues with take-up totalling 173,831 sq ft so far this year and a high level of demand remaining for the best possible space. The market has also seen an unprecedented level of regears as occupiers delay making a longer term commitment because of both uncertainty over future space needs and the lack of current Grade A availability.”
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