Demand returns to premium Glasgow market
After declining demand for office space during the whole of 2009 and much of 2008, Glasgow is seeing a sharp turnaround with rising occupancy levels for the first 6 months of 2010.
Demand for Grade A office space in central Glasgow is buoyant and accounts for over 50% of transactions in the first half of 2010. Reports suggest that prime rents have also increased by over 10%. Prime rents of £26.00 psf (per square foot) in January 2010 have been surpassed, with recent deals at the prestigious G1 building in George Square being secured at circa £29.00 psf. Some 82,000 of the available 130,000 sq ft within the 9 floor complex is already let.
In another significant transaction, NFU Mutual purchased the 77,000 sq ft Clarion Building in Wellington Street, predominately for its own occupation as Chartis UK had already signed-up for 8,000 sq ft of floor space within the building.
Within central Glasgow there is currently just one speculative office complex under construction, that being the 65,000 sq ft Copenhagen Building. This new development is nearing completion and offers Grade A office accommodation over 9 floors. The glass-fronted building is located in Hope Street, opposite Central Station in the International Financial Services District (IFSD).
Lettings agents expect the strengthening demand for Grade A space to have a knock-on effect upon good quality Grade B refurbishments, particularly in core city locations. Without new, premium developments coming to market, Grade A space availability will contract due to lack of supply rather than any lack in demand, creating an upturn in the B+ quality office accommodation market.
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