Scotland's office market is experiencing a significant shift, with premium space in high demand and limited supply. Discover the latest trends and insights.
The landscape of Scotland’s office market is undergoing a notable transformation, with a particular focus on the premium segment. While overall office demand is resurging, it is concentrated in a specific niche, creating a unique dynamic in the market.
In recent months, there has been a growing disparity between the availability of office space and the specific requirements of businesses. This mismatch is particularly evident in the demand for modern, high-specification buildings in prime city center locations.
Glasgow leads the way in office take-up
Glasgow has emerged as a key player in this evolving market, with a substantial increase in office space take-up. In the first quarter alone, more than 300,000 square feet of office space was leased, signaling a robust return of larger occupiers.
This trend is underscored by the average deal sizes, which have seen a significant uptick in recent years, indicating more decisive commitments to space.
Notable transactions in Glasgow include Shawbrook Bank and Sky, each securing more than 26,000 square feet of prime office space. These moves highlight the growing appetite for high-quality, centrally located offices among major corporations.
Edinburgh and Aberdeen see significant activity
Edinburgh has also witnessed considerable activity, with EY securing around 36,000 square feet of office space at Haymarket Square. This transaction underscores the continued demand for top-tier office space in the city’s prime locations.
In Aberdeen, the lettings at Marischal Square highlight the ongoing demand for quality space, particularly in sectors tied to GB Energy. This activity reflects the broader trend of businesses seeking out high-specification offices that meet their operational needs.
The challenge of limited supply
Despite the heightened demand, the supply of premium office space remains constrained. New development projects are limited, with construction pipelines falling well below historic norms. This scarcity is exacerbated by viability challenges that continue to stall potential schemes.
Grant Lonsdale, senior director of market analytics at CoStar Group, offers a stark perspective on the current market conditions: “There’s been a narrative since Covid that offices are empty everywhere, and that is still true in parts. But when you narrow it down to the very top end, there’s actually very little available. In Glasgow and Edinburgh, if you’re a larger occupier looking for around 10,000 square feet, you can pretty much count the options on your fingers.”
This insight underscores the critical shortage of premium office space in Scotland’s major cities, creating a competitive environment for businesses seeking high-quality accommodations.
