Demand for new office space has continued to rise during the first quarter of 2022 across Edinburgh and Glasgow.
New research has revealed that the number of 5,000 sq ft deals in the captial rose during the first few months of this year, compared to the same period pre-pandemic, according to commercial property specialist JLL.
It found that the average UK occupancy levels peaked in quarter one of this year, at 38%, returning to levels seen at the end of 2021.
In Edinburgh, there was a total take-up just short of 130,000 sq ft, with more than 90,000 sq ft of office occupancy in the city centre.
There was also an increase in the number of occupiers looking for space, compared to the first quarter in 2019, with professional services and technology, media and telecoms being the most active sectors at the start of the year.
JLL's data showed that the number of second-hand properties coming back to market was also on the rise, as firms targeted higher quality buildings and required less space as a result of the shift to hybrid working.
In Glasgow, take up across the city centre grew by almost 33%, compared with first quarter figures from 2021.
Glasgow saw more occupiers targeting higher quality space in the city, with many prioritising flexibility and a better working environment for their staff.
New build, Grade A supply in Glasgow is limited though, with only one new build development due to complete in the next three months; much of which has already been pre-let. Glasgow saw almost 82,000 sq ft of take-up this quarter.
The remaining new build or prime refurbished space is being quickly absorbed, with strong demand from the public sector, professional services and green energy firms.
Craig Watson, director at JLL in Edinburgh, said: “It is clear from our quarter one research that the number of office requirements in Edinburgh is back up to pre-pandemic levels, although this pent-up demand is not yet evident in transactional activity.
“Many occupiers are hesitant as restrictions are removed, waiting for their analysis on the ‘return to the office’ movement to run its course; this has undoubtedly delayed decisions and reduced transactions for this quarter.
“Hybrid working and sustainability are still the core themes driving demand, resulting in the best-in-class office space letting quickest.
“Knowing the extent of unsatisfied demand, we forecast transactional activity to grow in strength quarter on quarter this year.”
Alex Mackay, senior surveyor at JLL in Glasgow, said: “After a prolonged period of subdued activity, Glasgow’s office market is showing signs of recovery after the pandemic.
“As firms begin the process of attracting staff back to the office, they are seeking quality and flexibility in their real estate decision making.
“Like the capital, a common theme after the pandemic is occupiers increasingly paying attention to the ESG agenda, which in addition to hybrid working are driving demand for best in class office space.”
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