36 . Glasgow Business February 2017
OUT 0F T
he crane towers and construction sites that have been a regular feature of Glasgow’s city skyline over the past decade may disappear over the next few
years as the pipeline of new office developments dries up. Aſter a flurry of activity over recent years, the
number of new Grade A office buildings that have been built in the city centre have now largely been fully let and, although demand for office space still exists, developers appear to be cautious about investing in new office stock in the city in the current economic and political climate. David Cobban, Director of Office at Savills,
believes there is only about 80,000 sq ſt of new Grade A office space available at the moment. He said: “Recent developments
such as 110 Queen Street are already fully let and 1 West Regent Street and St Vincent Plaza, which was built at the same time, are nearly full as well. “Tis is a real issue for Glasgow
right now as there are no new Grade A office buildings being developed at the moment unless pre-let. All the activity is now focused on refurbishments – upgrading existing office space to a Grade A quality condition.” Tis trend can be seen in the refurbishment of
100 Queen Street, where Edrington Group has set up its new headquarters over four floors, and at 191 West George Street, which is currently being upgraded following the lease terminations of occupiers such as KPMG, CMS Cameron McKenna and Shepperd & Wedderburn. Although David sees the potential for a lot of
high-quality office supply to come back to the market in the next year or so through lease events, he does not think this will actually materialise. “If you track what’s happening over
the next few years, there is technically quite a lot of office space available if
people exercise their lease break options or termination agreements,” he said. “But, of course, they will have to
David Cobban
go somewhere else and, as there are no new office buildings available at the moment, there is a good chance that people will renew and stay in their existing premises.” Another spike in lease events in the city is
expected during 2018/19 but, as it takes around two-and-a-half years to get a new office development off the ground and ready for occupation, there will still be no new office to meet potential demand. David added: “Tis situation could continue
for another five years, which could mean that no one would speculatively build until 2020 to capitalise on lease events and terminations coming through in 2022/23.” In addition to refurbishment activity, there
have also been a number of pre-let new office developments recently, but, by their nature, they do not provide very much additional new office capacity. Recent pre-lets in Glasgow include Morgan Stanley’s new building in Bothwell Exchange and ScotishPower’s flagship headquarters in the former Strathclyde
As available office stock fills up,
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