Net zero and hybrid working demands lift office lettings
Cadworks: among newly-fitted out offices
Take-up of office space in Glasgow has risen significantly as businesses seek out buildings that meet demands on carbon emissions and hybrid working.
Agents let 250,659 sq ft in the city centre during the summer months – a 66% uplift on the 10-year average (165,043 sq ft).
There was a similar demand for out of town accommodation which saw a 61% increase to 131,960 sq ft compared to the 81,055 sq ft average over the past decade.
Research by Avison Young shows that momentum has significantly increased over the past three months.
This comes as occupiers reassess their office needs and target appropriately sized and flexible spaces, introduce hybrid working styles, and look to improve the overall quality of the workspace ahead of a full return to office (RTO) towards the end of 2021 and early 2022, it says.
Despite the national lockdown earlier in 2021, Avison Young predicts that the total year’s city centre take up will likely reach circa 550,000 sq ft, close to the city centre 10 year average take up of 661,000 sq ft.
Avison Young says this is exceptional considering the office market, and wider communities, were in full lockdown for most of the first half of 2021.
Alison Taylor, managing director of Avison Young, Glasgow, said: “Typically, older or poorly specified offices will need comprehensive refurbishments and upgrades to reduce energy consumption and carbon emissions.
“Avison Young expects many occupiers looking to relocate to seek out environmentally friendly offices, with many aspiring to secure Net Zero Carbon (NZC) office specification – which can only really be achieved in newly adapted office refurbishments and redevelopments, or by significant adaptation of their existing premises.
“Avison Young is also seeing occupiers shed surplus accommodation, leaving fully fitted opportunities for others.
“We are seeing this sort of fully fitted accommodation let up quickly, with new opportunities coming to market all the time.”
Avison Young’s research echoes a report last week from Lismore Real Estate which noted that the property sector spotlight is firmly placed on the environment and climate change “like never before”.
It said that that sustainability is now one of the key investment considerations – rated as the third most important purchase consideration by 74% of respondents.
The focus on green credentials was also contributing to a rise in the price of commercial property.
Avison Young said said the big lettings in the third quarter included The Student Loans Company securing 75,000 sq ft at Buchanan Wharf, and TLT taking the top floor of Cadworks. Further pre-lets during the quarter were at 177 Bothwell Street, involving BNP Paribas, Aecom, CBRE and Atkins at 2 Atlantic Square.
When these office developments are completed, they will bring circa 200,000 sq ft of Grade A accommodation to the market. However, Avison Young expects this to let quickly as current occupational demand continues to outstrip supply, with circa 500,000 sq ft of immediate requirements looking for accommodation.
DM Hall relocates
12 Bothwell Street
Chartered surveying firm DM Hall, is moving next month to 12 Bothwell Street where its staff will occupy a 2,300 sq ft ground floor unit.
It has taken a ten-year lease on the property, which was formerly occupied by GSPC estate agents.
The new premises, almost equal in size to its previous offices in St Vincent Street, will continue to house its Glasgow commercial team with the firm’s Shawlands office, on the city’s Southside, servicing residential clients.