New Report Welcomes a Cautiously Confident Glasgow Property Market
Published by Anne Marie Hughes on Sat 09 Jun 12 @ 22:15
Confidence in the Glasgow property market has shown signs of improving according to new research from Jones Lang LaSalle.
The EMEA Corporate Occupier Conditions report shows a recent upturn in sentiment, however many are still continuing to exercise caution as economic indicators paint a mixed picture in terms of the outlook.
Quarter 1, 2012 Glasgow results show city centre office take-up has more than doubled since Quarter 4, 2011 to approximately 115,000 sq ft. The most significant deals during this quarter involved the acquisition of 33,000 sq ft at 6 Atlantic Quay by HEROtsc and JPMorgan taking 20,750 sq ft at 141 Bothwell Street. Jones Lang LaSalle represented both occupiers.
Overall choice in the market remains stable with around 1.7 million sq ft available. However the supply of Grade A space has continued its decline, with a vacancy rate of 3.1%. Companies interested in locating in Glasgow now face a limited choice of Grade A space, particularly for requirements of over 30,000 sq ft in size, following a relatively low level of development completions in the last few years.
This limited choice in the traditional city centre business district has served to sustain prime rents, which, Jones Lang LaSalle report, at the end of Q1, 2012 stood at £27.50 per sq ft.
Jones Lang LaSalle anticipate that there will be no significant new build completions in the city centre until 2014 at the earliest, and that limited pre-lets are likely to become a feature of the market going forward.
Angela Pirie, from Jones Lang LaSalle's Glasgow office, said: "The quiescent nature of the Grade A supply pipeline will pose significant challenges to occupiers over the next 12-18 months. Even a slight upturn in demand will shift the market's dynamic, potentially forcing occupiers into expensive and compromised real estate decisions.
"Occupiers will also start to re-absorb currently surplus space before looking elsewhere. We have already witnessed a number of financial institutions re-occupying offices which they had previously placed on the market in Glasgow.
"Corporate real estate is set to follow a new set of 'norms' which may lead to fundamental shifts in market behaviour in years to come. It is highly probable that activity levels will continue to be more subdued overall with very selective investment in real estate driven by a need to do more with less."
To read the report in full please visit: http://www.joneslanglasalle.co.uk/UnitedKingdom/EN-GB/Pages/ResearchDetails.aspx?ItemID=8217