Research released today by Lambert Smith Hampton finds that the increasing lack of Grade A office space in key Scottish city centre locations is stifling take-up.
Total availability of 6.9m sq. ft across the market is the lowest level since 2013, with a particular lack of large floorplates that is stymieing larger transactions.
However, brighter times are ahead; speculative development has reached its highest level since 2015, which coupled with the start of regeneration schemes provides a welcome pipeline.
The Scotland Office Market Report 2019 details how Scotland’s occupier market continues to display resilience despite continued political uncertainty due to Brexit.
Across the board, take-up in the Scottish market has remained relatively steady but a lack of high-profile deals was noticeable compared with 2018. This can be partly attributed to a lack of Grade A city centre availability in 2019 in both Edinburgh and Glasgow.
Despite a lack of supply and continued political uncertainty, office investment volume across the first three quarters in Scotland for 2019 was 16% above the same period in 2018. Furthermore, investment volume was 15% above the ten-year average with one quarter still to be accounted for.
Aasia Mohammad, Head of Office Advisory – Glasgow at Lambert Smith Hampton, said:
“The resilience of Scotland’s occupier market is standing firm, despite lack of Grade A supply and large floor plates in key locations. The significant pipeline of speculative developments is highly welcome.
“Since mid-2017, the Scottish office investment market has been out-performing expectations and showing considerable resilience in the face of political challenges. Investors continue to demonstrate their appetite for Scottish offices especially in the key locations of Edinburgh and Glasgow.
“With these opportunities in mind, a forensic understanding of the market remains critical. This report demonstrates the depth and sophistication of the key office markets in Scotland”.
To download Lambert Smith Hampton’s ‘Secure Our Supply’ report on Scotland’s office market, please click here.
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