Property at a premium
Office space shortage forcing up rents and enticing buyers
191 West George St has been among offices recently let
Rent rises in Glasgow and Edinburgh are likely as a result of a shortage of top quality space which is likely to encourage more investment, says a property agency.
CBRE says office take-up in Glasgow for the first half of 2019 totalled 259,501 sq ft and the amount of Grade A space available within the city centre is now at an all-time low. There remains only 12,297 sq ft on the market, representing a vacancy rate of just 0.09% for Grade A accommodation. Supply of Glasgow space has dropped overall and now sits at 1,224,629 sq ft.
Notable deals included the 41,665 sq ft taken by Hilton at 191 West George Street, the 20,227 sq ft at 141 Bothwell Street secured by JP Morgan, and the 13,801 sq ft at Granite House let to Clydesdale Bank. Tech giant ARM Holdings took 26,910 sq ft across the ground and first floors of St Vincent Plaza, with the development now fully let.
The Edinburgh office market remains in a healthy state following Q2 2019, with 176,549 sq ft of take-up – just 9,210 sq ft short of the previous quarter’s figure.
Meanwhile, annual take up at the end of Q2 2019 is up c.2% on the previous 12 months at 840,640 sq ft, suggesting occupier sentiment remains positive.
Grade A take up throughout the city has also risen significantly from the last quarter to 92,211 sq ft – an increase of 56%. This was mainly due to the 35,608 sq ft taken at South Gyle Business Park’s Broadstone building by Instant Offices and the letting of all seven floors at 80 George Street (c. 44,000 sq ft) to flexible office provider WeWork. Law firm Womble Bond Dickinson finalised its lease on 7,357 sq ft at 2 Semple Street at the end of June, further reducing available Grade A space in the city centre.
At 362,308 sq ft, H1 2019 take-up was down 26% from the same period in 2018, however the 2018 figure (491,885 sq ft), was skewed by the short-term charity letting of 105,000 sq ft at 105 Ferry Road. When removed, take-up figures year on year are almost identical.
Campbell Dallas expands Glasgow office
Campbell Dallas’ is expanding its office at Braehead, Glasgow by 4,000 sq ft, an increase of 25%, and hiring an additional 40 staff as it builds on the recent merger with Scott Moncrieff.
The firm expects the extra space to be fully occupied by the year end, taking staff working from the Glasgow office to more than 200. The firm is investing over £250,000 on the installation of utilities, cabling, technology, work-stations and office equipment.
Since 2013 Campbell Dallas has recruited 119 apprentices and graduate trainees, including a record intake of 13 school leavers joining in 2018.
Peter Gallanagh, partner in charge of the expansion, said: “The extra space will be a huge asset to the Glasgow office, which has seen double digit organic growth over the last five years.”
The merger of Campbell Dallas and Scott Moncrieff created one of Scotland’s largest business advisory firms with a combined fee income of around £40m and employing more than 500 staff in 10 offices.