Edinburgh and Glasgow’s office markets recovered in 2021, as strong leasing volumes highlighted a return to near pre-pandemic occupancy levels.
Property services firm JLL’s Big Six report showed that office leasing across the two cities surpassed 1.2 million sq ft by the end of last year.
Edinburgh finished the year particularly strongly, with 296,200 sq ft in new transactions – its second-best quarter since 2018 – pushing annual take up to 711,400 sq ft, down just 14% on the capital’s 10-year average.
Grade A office space remained in high demand, with vacancy at just 1.1% by the end of the year. However, a surplus of Grade B and Grade C space pushed Edinburgh’s overall vacancy rate up to 5.2%.
The capital was buoyed by £320m of investment, in line with the 10-year average of £316m. The largest transaction in the fourth quarter was CBRE Investment’s purchase of Exchange Place One for £59m.
Across the M8, Glasgow leasing volumes reached 496,700 sq ft in 2021, which exceeded the previous year, but remained down on the 10-year average.
The overall vacancy increased to 6.9% in the fourth quarter, although Grade A space remains scarce, with vacancy standing at just 1.8%.
Investment levels (£251m) were the highest seen since 2018 and only marginally below the 10-year average (£263m).
Alasdair Humphrey, head of JLL in Scotland, said: “These figures point to a positive post-Covid resurgence in Scotland which we’re seeing carry through from the second half of last year into 2022.
“There is strong momentum in the Edinburgh and Glasgow markets, which are now close to pre-pandemic occupancy levels.
“Real estate and infrastructure investment are at the centre of rebalancing the UK’s unequal economic geography, and surpassing pre-pandemic occupancy levels this year is likely to spell good news for local growth.”
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