Q1 office market stats in Scotland from JLL
• The number of 5,000 sq ft and over deals in Edinburgh and Glasgow in Q1 rose compared to the same quarter pre-Covid.
• The average UK occupancy levels peaked in Q1 at 38%, returning to levels seen at the end of 2021, with occupancy levels in Edinburgh rising across Q1.
• In Edinburgh, there were more deals of 5,000 sq ft or over compared to the same quarter in 2019.
• There was also an increase in the number of occupiers looking for space in Q1, compared to Q1 2019, with professional services and technology, media and telecom (TMT) the most active sectors at the start of the year.
• In Glasgow, there were more 5,000 sq ft and over deals compared to the same quarter pre-Covid and compared to the same quarter in 2021. In addition, take up across the city centre grew by almost 21,000 sq ft, compared with Q1 figures from 2021 and the city’s market is anticipated to perform strongly in Q2 as well. Glasgow saw almost 82,000 sq ft of take-up this quarter.
• After a tumultuous 2020 and 2021, many requirements in Glasgow and Edinburgh are focusing on creating a compelling employee value proposition to attract and retain skilled talent amid increased competition. Consequently, the number of grey space options coming back to market is also on the rise, as firms target higher quality buildings and require less space as a result of the shift to hybrid working.
Craig Watson, Director at JLL in Edinburgh, said: “It is clear from our Q1 research that the number of office requirements in Edinburgh is back up to pre-pandemic levels. 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.”
Other themes included:
• Increase in public sector requirements (up to 400,000 sq ft live)
• There are a couple of energy/utility firms looking (c.50,000 sq ft)
• Increasing supply due to completion of a number of new builds, but quickly dropping as many of the large requirements absorb this space
• Reduction in size of space needed for many requirements
• Professional services and TMT were the most active sectors in 2021 and this continues to be the case for this first quarter, with the majority of live requirements sitting between these two sectors.
• Grey space options coming back to the market, supporting the flight to quality and reduction in space required due to hybrid working.
• A lot of requirements are focusing on creating a compelling employee value proposition to attract and retain skilled talent amid increased competition – aiming for a workforce that feels energized, valued and productive.
If you have any questions, please do let me know. We will be sharing a fuller update later this week, with additional take-up stats.