Glasgow Business . 37 www.glasgowchamberofcommerce.com


SPACE developers are being cautious


Regional Council building on St Vincent Street. Alan Gordon, Principal Commercial Partner


with Chartered surveyors DM Hall, said there is also a growing shortage of high-quality office space in the secondary market – older offices that have been refurbished to higher standards. He said: “Everyone has recognised that


occupier demand in the Grade A office space, with its focus on large, pillar-free, open-plan floor space, has been buoyant in recent years but we’ve reached a situation where there is limited stock leſt. “Even good quality secondary market office


stock, typically 3,000-5,000 square feet open plan floor space, is becoming difficult to find in the city.” Tere has also been a reduction in the amount


of office stock available for refurbishment as some buildings have been redeveloped for hotel or residential use. For example, the building at 179 West Regent Street has become a new five-star Dakota Deluxe Hotel, the former HMRC offices at 200 West Regent Street are now a halls of residence for students, and Strathclyde Police’s


headquarters at Pit Street was recently sold to be converted into private rented homes. In addition to the current uncertainty in the


office real estate market, Alan believes sluggish rental values are another factor in keeping developers shy of the market. He explained: “Te landlord needs to see


rental growth potential to ensure that their investment will provide a suitable return to the risk they take in the development. “At the moment, although there has been some


growth in rental values it has been sluggish, and labour and building costs for developments or refurbishment of offices has been rising higher that rental costs. “Ultimately supply and demand


determines price, but at the moment although there is a shortage of supply and a reasonable level of demand the real concern is that this demand is not sustainable because of economic, political and constitutional issues.”


Alan Gordon Owing to the current supply squeeze in high


quality office accommodation in Glasgow, some organisations are looking outwith the city centre. Tere are a number of developments around


Glasgow that can provide high-quality office space with ease of access to the M8, M74 and M73. To the east is Maxim Park, at Eurocentral, just off the M8 at Coatbridge, and Hillington Park is only seven miles west of the city centre. Another development planned to increase


office capacity for the future is the Magenta at Clyde Gateway project – a new satellite business district for Glasgow and one of the UK’s largest office parks which is planned in the Shawfield area, in the east end of the city. Te development will comprise 1.2 million square feet of office space, set on 27 acres next to the River Clyde and M74 motorway network and just 10 minutes from Glasgow’s city centre. It is estimated that the development will bring at least 12,000 new jobs to the area.


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