Office Demand in Edinburgh and Glasgow

Both Edinburgh and Glasgow recorded strong office demand in 2014 with Edinburgh deals totaling 740,000 sq ft including large lettings to Standard Life, Rockstar and FNZ. In Glasgow take-up reached 686,000 sq ft including large transactions involving Network Rail, Cigna Insurance and Clydesdale Bank. Metropolis reported on 476 deals, expansions and requirements in the Scotland in 2014.

Looking ahead, Metropolis has just completed an analysis of current named office demand in the city centres of Scottish cities. The survey encompasses 80 different companies that have told Metropolis that they are looking for office space in Edinburgh, Glasgow and Aberdeen over the past 12 months 2014-15.

The current total of office space required by the 80 companies tracked by Metropolis, is 82,300 sq m (885,600 sq ft) as of April 2015. Edinburgh takes the lion’s share of demand with 41,000 sq m (441,300 sq ft) of named requirements, followed by Glasgow with 38,800 sq m (417,600 sq ft).

By sector, financial services dominates by volume (boosted by a large Morgan Stanley search in Glasgow), followed by media and business services. However, it is business services which has the highest number of individual searches, followed by IT, recruitment and media. Public services, including Government agencies, remain an important slice of the market. By size band, 22 searches are 930 sq m (10,000 sq ft) and above; 20 are between 5,000 sq ft and 9,999 sq ft, with the remaining 33 searches less than 5,000 sq ft. Metropolis has analysed the reasons for an office search and lease expiries tops the poll with 58% of searches, followed by expansion on 32% and new office bases on 10%.

The predicted upsurge of demand following the referendum has not yet materialised, but the largest current searches are Morgan Stanley, Aecom and Aegis Global in Glasgow, Pinsent Masons, Simpson & Marwick, WS Atkins and EY in Edinburgh. There are nearly 100 companies in Glasgow and Edinburgh approaching lease expiries in 2015 to 2017, including Deloitte, KPMG and Brodies which are yet to make a decision. Local agents are predicting that new redevelopments and refurbishments are imminent due to lack of grade A supply in both cities.

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