Eaton Corporation has secured new office space in Glasgow.
Relocating from Tay House on Bath Street, the power management solutions business has taken a suite on the sixth floor, extending to 1,720 sq ft, at the newly-refurbished Onyx building on Bothwell Street.
Onyx now has a new entrance and reception area with a café, air conditioning and LED lighting, as well as wellness facilities on the basement level.
Hannah Lowe, assistant surveyor at CBRE, which represented Eaton in the transaction, said: “Eaton is a global player in the power sector and required a prestigious workplace for its relocated Glasgow office - I’m sure the team will find the new space in Onyx to be an ideal fit.”
Stefano Joannidis, finance manager a Eaton in Glasgow, added: “We are extremely pleased and excited to move into our new office space at Onyx - this will fit perfectly with our current requirements and will provide the right working environment for our Glasgow team.”
Take-up for the Glasgow office market totalled 115,825 sq ft in the final quarter of the year, according to CBRE - down from the previous quarter, but up 33.5% against the same period in 2020.
A total of 42 lettings took place across the quarter, with the biggest being another pre-let at 177 Bothwell Street; Transport Scotland took almost 50,000 sq ft at the new development.
Other notable deals included The Wise Group taking 6,667 sq ft at Templeton on the Green, and Experian’s 5,249 sq ft letting at McLellan Works.
CBRE's data showed that 603,000 sq ft of office space transacted across the year - and while this is lower than the city’s long-term annual average, it indicates growing confidence in the city.
Its report showed that 128 businesses took new space within the city in 2021, up 42 from the previous year’s figure.
The noticeable uptake in the number and volume of deals for the year has led to larger deals concluding, with seven deals surpassing 20,000 sq ft in 2021. The largest of which was The Student Loans Company’s 75,000 sq ft pre-let at Buchanan Wharf.
Although office supply has crept up slightly, the demand for best-in-class Grade A space within the city remains evident - numerous pre-lettings at 177 Bothwell Street were confirmation of this trend.
Grade A supply within the city therefore remains at a premium, with just 0.64% of Glasgow’s entire office stock (2.252m sq ft) currently being considered as vacant Grade A space. With several larger requirements out already in the market for 2022, it expected that the little Grade A space that is available will transact quickly.
The lack of Grade A supply has put pressure on rents. Prime office rents are at a record level of £35.25 per sq ft, with secondary rents also growing at a much faster pace than witnessed before as many developers are forced to refurbish old space due to the lack of new developments coming out of the ground.
Martin Speirs, associate director from CBRE in Glasgow, said: “As 2021 drew to a close, Glasgow’s office market recovered strongly from the effects of the pandemic in 2020 and prospects for this coming year look even better.
“2022 is shaping up to be an exciting year with strong demand expected to continue, especially for the best-in-class buildings and those that can meet occupiers growing focus on ESG credentials.”
Office take-up in Edinburgh totalled 294,441 sq ft in the final quarter of 2021 - up 101.8% from the previous quarter and 77.7% against the fourth quarter five-year average. It brought Edinburgh’s total take-up for the year to 688,238 sq ft.
A flight to the best quality space remained the trend for the rest of the 2021 with Grade A take-up in the final quarter totalling 187,996 sq ft.
Notable deals included the letting of the newly completed 2 Freer Street in Fountainbridge, in which Fanduel acquired the whole building, comprising 59,000 sq ft. There has also been further activity at The Haymarket development where Capricorn, Shepherd & Wedderburn and Deloitte have all taken space totalling 78,610 sq ft.
The city centre new Grade A vacancy rate totals just 0.69% with an extremely limited supply on the horizon. There were also notable sub-lettings, with User Testing taking 13,682 sq ft at Exchange Crescent, and Unity Technologies acquiring 8,950 sq ft at Capital House.
Prime rents in Edinburgh have grown throughout the year which can be attributed to the tight supply of new Grade A developments and the flight to quality space in response to drivers such as ESG and staff wellbeing. Prime rents now sit at £38.50 per sq ft but this is expected to grow in the coming months with rents of £40 per sq ft on the best space achieved at the new Haymarket development.
Office take-up in Aberdeen for the fourth quarter was the strongest for the year, with 91,000 sq ft transacting across 14 deals between October and December - a 77.3% increase from the previous quarter.
However, with Covid restrictions ongoing, Aberdeen has struggled to recover at a quicker pace than Scotland’s other big cities, as many businesses continue to hold off making decisions on property strategy until measures are eased and the true impact of hybrid working is assessed.
The total office space take-up for 2021 was 197,914 sq ft, which is 47% below the five-year average and Aberdeen’s lowest level of occupational take-up since CBRE records began.
The largest deal of both the quarter and 2021 overall was at the former Chevron House at the Hill of Rubislaw, where Ithaca Energy made a commitment to purchase its 96,357 sq ft office headquarters, having originally intended to downsize in the building.
Other notable deals for 2021 include MRS Training & Rescue taking 18,264 sq ft at Aberdeen Innovation Park, Mental Health Aberdeen taking 11,827 sq ft at Langstane House and HSE/The Met Office concluding on 11,237 sq ft at Aberdeen International Business Park in the first quarter.
Supply has continued to rise as the year draws to a close. There is currently 2.793m sq ft of available office space within Aberdeen, representing a total vacancy rate of 27.93%. Grade A space remains at a premium though, as new stock continues to prove popular with occupiers. There is currently only 491,527 sq ft of available Grade A space within the Granite City, representing a vacancy rate of 4.92%.
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