Demand outstripped take-up in Scotland’s largest city during the first half of the year, according to the latest figures from CBRE.
There are more than 800,000 sq ft of active requirements for office space in Glasgow, but just 225,000 sq ft has been let so far this year, representing 75% of the long-term half-year average.
CBRE said the subdued take-up was not a reflection of a reduction in occupier confidence but was rather a consequence of the timing of recent building completions.
The largest deal during Q2 was the 27,522 sq ft letting to Teleperformance at Cuprum, with the only other deal exceeding 10,000 sq ft being a letting to Arup at 1 West Regent Street.
Prime rents for the city currently stand at £29.50 per sq ft but are expected to soon break the £30 barrier.
Audrey Dobson, senior director at CBRE in Glasgow, said: “The unprecedented level of occupier demand in Glasgow is rapidly eroding the availability of large floorplate options within prime grade-A buildings. This is encouraging an increasing number of occupiers to “fast track” their requirements to ensure that they can secure suitable accommodation from the current stock of buildings.
“This increased market activity will drive rental growth and although it has not yet triggered any new speculative development in the city we expect that to be the next stage in the market cycle.”
Elsewhere in Scotland, Edinburgh has proven to be the most robust of the country’s three main cities, with more than 400,000 sq ft of office space occupied during the first half. Rental levels currently stand at around £30 per sq ft but are expected to rise to more than £32 per sq ft over the next 24 months.
Despite the steady decline in oil prices, activity has remained robust in Aberdeen with H1 take-up slightly higher than a year ago at 289,994 sq ft. However, this was down massively on H2 2014, when 800,000 sq ft was let.
Again, CBRE expects to see rental growth in the city. Rents currently hover around £32 per sq ft.
samantha.mcclary@estatesgazette.com
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