Scottish commercial office sector severely hit by Covid-19

10 July 2020 | General

Office markets in Edinburgh, Glasgow and Aberdeen were depleted in the second quarter of the year, CBRE research shows.

This is hardly surprising, given that the nation spent almost the entirety of the period in lockdown.

Over the second quarter of the year office take-up in Edinburgh totalled 26,876 sq ft, an 84% drop from the same period in 2019.

Stewart Taylor, head of CBRE’s Scottish office agency business, said: “The offices sector, along with every other sector, has not emerged unscathed from the COVID-19 pandemic. The figures are unsurprising, particularly as buildings couldn’t be viewed or surveyed. If anything, activity was actually better than expected.

“What has been encouraging is that despite an industry-wide debate on how we will work in the future, occupiers have continued to progress acquisitions and the last three weeks have seen a marked increase in the speed at which negotiations and deals are progressing.

“While offices in the future may look different and may be smaller than anticipated at the start of 2020, the desire to have an office base remains and in fact much of what we’re seeing is simply an acceleration of trends that were already occurring – a flight to the best quality space with the best wellness credentials.

“With the delay in the completion of new buildings, the critical shortage of new space in Edinburgh and Glasgow has simply been exacerbated. This, coupled with positive employment forecasts for the regions, means we don’t foresee any impact on headline rental levels.”

The quarter witnessed a record low number of deals, with just 11 completing between April and June.

In terms of supply, 1,609,237 sq ft of office space is available in Edinburgh, a 21% increase year-on-year.

This post has originally been featured in Property Wire.