The quarterly review shows the take-up in the major regional office occupier markets in the UK, including Glasgow and Edinburgh.

Both cities feature in Q3’s top five deals with the Student Loans Company occupying 75,000 sq ft Buchanan Wharf in Glasgow’s waterfront and a confidential occupier taking 50,000 sq ft in Elgin House, Edinburgh.

Total take-up during Q3 in the Glasgow area – city centre and out-of-town – was 55% above the ten year quarterly average, while in Edinburgh there was a healthy take-up of almost 150,000 sq ft.

Key stats and highlights of Glasgow’s Q3 occupier activity

• Glasgow office market shows an increase in letting activity, with exceptional take-up figures for Q3: 250,659 sq ft in the city centre and 131,960 sq ft out-of-town - 55% above the ten-year quarterly average
• The Student Loans Company take 75,000 sq ft at Building 6 Buchanan Wharf in one of the UK’s top five deals
• Two of the top five out of town occupancies in the UK were in Glasgow with American Night Productions Limited taking 30,997 sq ft at 2 Central Quay and Beeks Finanical Cloud taking 27,999 sq ft at Riverside Business Park Braehead
• Another landmark development at 2 Atlantic Square, with a recent 20,700 sq ft pre-let secured with Atkins
• At Cadworks, Glasgow’s most sustainable office building, the first tenant, TLT Solicitors, has signed on the top floor
• New office developments will bring circa 200,000 sq ft of new Grade A available accommodation to the market.
• The appetite for new developments in Glasgow continues, with 1,186,500 sq ft under construction

Paul Broad, director at Avison Young Glasgow, said: “With the economy finally starting to open up, momentum is really building in the Glasgow office market as the return to the office continues to accelerate. A number of key deals for new development space has pushed up take-up figures in the city centre and out of town by a combined 55% above the ten-year quarterly average.

“We are expecting this trend to continue with many occupiers increasingly sensitive to meeting their environmental obligations by pledging to reduce energy consumption and carbon emissions.

“It is becoming more apparent that this cannot be achieved within existing office accommodation and with more space coming back to the market, dated and poorly insulated offices will need comprehensive refurbishments and upgrades.

“The new ‘normal’ has also seen a marked change in what companies are now offering their staff in a bid to get them back to the office, with staff wellbeing and access to the latest technology now viewed as essential rather than nice to haves.

“This demand for quality office space should see another strong quarter in Q4 , pushing activity close to the five-year average in both the city centre and out of town markets.”

Edinburgh key statistics and highlights of Q3’s occupier activity:

• The Edinburgh office market has recorded a healthy level of take-up during Q3, amounting to 121,413 sq ft in the city centre and 26, 220 sq ft out of town, although this is 25% down on the ten-year average.
• A confidential occupancy for 50,000 sq ft at Elgin House is one of the UK’s top five city centre deals overall-
• Other major deals include Scottish Prison Service taking 21,757 sq ft at 1 Lochside Avenue and Optical express occupying 7,833 sq ft at Apex 2, 97 Haymarket Terrace
• The Edinburgh office rental market demands the highest headline rent of the nine featured city centres in Q3 with £37.50 per sq ft.
• The out-of-town office market sees above average rents of the nine featured cities with £24.00 per square foot (£3.42 above the average)
• Demand remains robust with significant interest in the two city centre office buildings under construction –1 New Haymarket Square (110,000 sq ft) & 2 Freer Street (60,000 sq ft).
• There are several comprehensive refurbishments underway and pending, including 50,000 sq ft Excel House, Semple Street; and 80,000 sq ft 60 Morrison Street
• 24-25 St Andrew Square and 116 Clarendon House are also to be repurposed having recently become vacant

Peter Fraser, director at Avison Young Edinburgh, said: “The big return to the office, combined with the need for occupiers to satisfy ESG and sustainability requirements, has resulted in more demand for ‘best in class’ accommodation. This has prompted landlords to invest in upgrading their buildings across all types of office space.

“Better amenity space to make surrounding areas more aesthetically pleasing, shower and bike facilities are now becoming standard in many office spaces, which is pushing up rents as competition hots up for these sought after buildings.

“With a time lag in the city centre development pipeline, we expect some of this pent-up demand to look towards West Edinburgh and fringe or out-of-town locations where good quality, grade A offices with large floorplates exist.

“Improved infrastructure, public transport connections and new mixed-use development with residential, amenity and leisure facilities is transforming some of these locations.

“Overall, the Edinburgh office market has recorded a healthy level of take-up during Q3, with confidence levels upbeat in the lead up to Christmas. During this period, we expect to see several prime, city centre lettings and pre-lets announced.

“This will put pressure on grade A stock levels, and we expect a new headline rent to be achieved in the city.”

To read the full research update on Big Nine office markets (Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Liverpool, Manchester and Newcastle), click here.