Positive start to year for Glasgow’s commercial property market
Commercial property take up in Glasgow city centre for the first quarter of 2018 has increased by around 145% on the same time last year, new figures have shown.
Knight Frank said there has already been 252,491 sq. ft. of take up this year, much higher than the 103,000 sq. ft. taken up in the first quarter of 2017 and above the five-year average of 198,544 sq. ft., though this includes the Government Property Unit’s (GPU) pre-let at Atlantic Square.
A range of occupiers fuelled demand into 2018, as reflected by recent deals concluded in the sector. Notable quarter one agreements included GPU’s 180,000 sq. ft. pre-let at Atlantic Square, serviced office provider, Orega, taking 21,939 sq. ft. at 9 George Square, commercial property agents, GVA, acquiring 4,698 sq. ft. at Sutherland House and HRC Recruitment agreeing to 5,200 sq. ft. at 180 St Vincent Street.
International consulting group, COWI, also recently moved into 310 St Vincent Street, taking 6,981 sq. ft. in a deal brokered by Knight Frank.
Colin MacKenzie, office agency partner for Knight Frank in Glasgow, said: “Businesses are on the move – as demonstrated by the Glasgow office market’s growth in Q1 and indeed shown by the spike in deals at the close of 2017.
“However, even with a very healthy development pipeline offering some fantastic schemes, it will be 24 to 36 months before any of those are deliverable. With Glasgow’s occupier requirements currently sitting at 850,000 sq. ft., we will undoubtedly enter into a period of significant pre-letting as occupiers jostle for prime sites, some of which are likely to be announced in the near future.”
Sarah Addis, senior surveyor for Knight Frank in Glasgow, added: “While prime rents remained at around £29.50 per sq. ft. in 2017, given the low supply environment, we will certainly see rents breach the £30 mark through the course of 2018.
“As it stands, all of the remaining Grade A space is either under offer or has noted strong occupier interest, meaning now is the time for the city’s major refurbishment schemes to capitalise on the requirement level and take centre stage.”