Vacancy rates down
Robust office demand in Scottish cities
Office occupier take up in Edinburgh continued to show strong overall demand although more than half of this related to two large deals.
In excess of 283,000 sq ft was transacted between January and March, a 34% increase in occupier activity compared to the same period last year, but down slightly on 2015’s final quarter figure of 330,000 sq ft.
Forty-five occupier deals were transacted over the period. Strong demand was particularly noted at the upper and lower size brackets within the market, however there were only three mid-market transactions being between 5-20,000 sq ft.
Two-third, or 63%, of Q1 uptake was generated by two transactions – Edinburgh Napier University purchasing Forthstone, Broadstone and Cornerstone at South Gyle Business Park (107,514 sq ft), and the pre-let to Cirrus Logic at Quartermile 4 (70,041 sq ft – pictured). JLL was involved in both deals, advising Edinburgh Napier University and Cirrus Logic.
Glasgow’s property market got off to an impressive start with total take-up of 288,987 sq. ft. dwarfing the 142,358 sq. ft. in 2015, an increase of 103%
It was also up 37% on the previous quarter (Oct-Dec 2015), where city centre take-up was 211,649 sq. ft. Across the Greater Glasgow area, take-up was recorded at 350,871 sq. ft.
In total, there were 58 deals completed with 31 of those for properties in the city centre. The largest deal saw Morgan Stanley pre-let 154,814 sq. ft. at Bothwell Exchange – the biggest deal in the city since ScottishPower pre-let 220 St Vincent Street in 2013.
Vacancy rates in the city centre have decreased to 10%, with Grade A vacancy down to 2.6%. The immediate supply of Grade A space is 493,171 sq. ft, of which 85% is new build.
The city centre headline rent was £30 per sq. ft. and is expected to remain stable throughout 2016 with the demand for new build Grade A offices.
Other major transactions in Q1 included ACCA letting 55,744 sq. ft. at 110 Queen Street and Registers of Scotland taking 17,924 sq. ft. at St Vincent Plaza.