Records continue to tumble for Glasgow’s booming office market
Glasgow's commercial property market has witnessed a record quarter for office deals, with city centre occupier take-up exceeding 1 million sq. ft. for the year to date, according to data from JLL.
Thanks in large part to Barclays, which redefines the 'city centre' parameters to cross the river Clyde, total take-up across Glasgow's city centre reached 614,466 sq. ft. between July and September, spread across 31 deals.
Glasgow's record quarter for office transactions brings the city centre's total take-up for the year to date to 1,192,689 sq ft with three months of the year still remaining. By marked contrast, office occupier take-up for 2017 totalled 627,313 sq ft.
In the largest deal of the quarter, and the year to date, Barclays took a 470,000 sq. ft. pre-let at Buchanan Wharf. Other notable deals in the city include 60,000 sq. ft take-up at 123 St Vincent Street, and Glasgow School of Art and CXP Limited both signing new deals for more than 10,000 sq. ft. of city centre space.
In the first six months of 2018, take-up of city centre office space amounted to 578,223 sq. ft., which was already boosted by notable major pre-let activity to the HMRC at Atlantic Square, and Clydesdale Bank's 110,955 sq. ft. pre-let at 177 Bothwell Street. JLL have been involved in four of the top five largest deals in 2018 to date, and almost a third of all transactions this quarter.
A sustained increase in take-up continues to place constraints on supply, with vacancy rates decreasing from 6.92% in Q2 to 6.89% in Q3, and new build vacancy rate at just 0.21%.
According to JLL, with new occupier enquiries also increasing from 43 to 60 in Q3, Glasgow's office market is continuing to attract activity and proving itself to be a desirable location for business to operate.
Alistair Reid, Director at JLL, said: "With total take-up already exceeding 1 million sq. ft., we anticipate that 2018 will be the best year for office take-up in Glasgow in recorded history. While the landmark Barclays deal has been a major contributing factor to Glasgow's bumper Q3, it should not obscure the strong performance of the city's office market during the course of the year. From larger corporates and government departments to SMEs and fintech firms, requirements and new enquiries for city centre space remain strong. It's inevitable that this demand will continue to impact supply, but with three new speculative developments in the offing, there is at least a pipeline of new build supply further down the line."