PROPERTY: COMMERCIAL
100 INSIDER March 2020 http://www.insider.co.uk
a 4,788 sq ft refurbished suite in
Sutherland House, 149 St Vincent
Street.
For LGIM Real Assets, it let
2,122 sq ft of refurbished offices at
205/209 West George Street to a UK
private equity firm and to existing
tenant, Maven Capital Partners UK.
“We expect these strong levels of
demand to continue throughout
2020,” said Michael Facenna, an
associate in the Business Space team.
The 3,600-tonne steel frame
is being erected for what will be
Glasgow’s largest single office
building. Work will begin in April
on the 12,500 sq metres of glazing at
HFD Group’s 177 Bothwell Street.
Completion is scheduled for Q2 next
year and CYBG, owner of Virgin
Money, has signed a long lease for
more than 160,000 sq ft.
“The Glasgow office market has
performed well,” says HFD Property
Group managing director Stephen
Lewis, adding: “The last few years
have been characterised by single
occupiers taking large amounts of
space in the city. It’s become almost
normal, with Barclays, Morgan
Stanley and Virgin Money’s big
moves demonstrating the point.
“Although there is around
one million sq ft of space under
construction in Glasgow, the amount
of available space within that is
relatively small and, if requirements
remain at current levels, it will not
last long.”
Developer Osborne+Co, whose
first Scottish development is the new
European Technology Centre for its
partner JP Morgan Chase in Argyle
Street, Glasgow, is expected to submit
planning applications for the Met
Tower in the Innovation District and
for Lancefield Quay.
“Many large occupiers are looking
ahead to a 2021 or 2022 move as
they have upcoming lease events and
will look to move to more modern,
efficient space and are in the market
to secure space now knowing there
are limited options over the next
two to three years,” says Will Hean,
Osborne’s development director
Scotland.
Out of Glasgow’s centre is
Magenta business park where, says
Guy Marsden, director at the park’s
development partner Highbridge
Properties, demand for office space
is high. “We saw this first-hand with
the take-up of office space at Red
Tree Magenta – the first building at
the Magenta business park which was
fully let in a matter of months.” As a
result they plan to begin Magenta’s
next development phase this year.
Aberdeen’s office market is in
recovery, according to Savills. Q4
2019 was the busiest quarter in more
than five years with approximately
240,000 sq ft of deals completing.
“The tide is turning in Aberdeen and
we’ve seen confidence return to the
market following a recovery in the
energy sector and rising oil prices,”
says Dan Smith, head of Savills
Aberdeen.
Engineering, extraction and
utilities accounted for 63 per cent of
last year’s take-up. “While Aberdeen
does still suffer from an over-supply
of office accommodation much of
this space remains obsolete.”
Alan Stewart, partner in thecommercial real estate team at
Morton Fraser, believes any “Brexit
bounce” might be limited. “As the
cliff edge of a ‘no deal’ and disorderly
exit returns at the end of 2020, there
remains a risk transactional activity
will become constrained again.”
However he added: “In Scotland
the more relevant factors driving
increased activity will be the uptick
in economic activity triggered by
the flows of increased government
spending in the UK regions in
response to new political alignments
generally. A UK-wide approach is
likely to benefit both Edinburgh and
Glasgow and demand in both those
locations is likely to trigger sustained
office development activity.”
Chris Narrowmore, partner
at property and construction
consultancy Thomas & Adamson,
recognises the “shortage of Grade
A office space in Scotland”, but
“while speculative developments
are still being taken through to
planning approval, largely these
do not progress until a significant
proportion of the scheme is pre-let.
In the current political and economic
climate this is unlikely to change
substantially any time soon.”
Other options, such as townhouse
conversions, bring their own
problems. “Townhouse management
can have its challenges and those
buildings require a different approach
from the standard modern offices,”
says Gosia Nieszporek, a director
at facilities management firm
Cowiesburn.
“Often they are listed due to their
special architectural or historical
character which could include the
main external features such as the
walls, windows, railings and roofs
and internal features to make up so
much of the historic character such as
timber panelling, staircases, fireplaces
and decorative cornicing.
“Therefore, it is important to
ensure that your appointed property
managers understand and respect
that and don’t allow any alterations
which could jeopardise their unique
character.”
She explains: “We tend to go with
local contractors who we find usually
offer a better hands-on service as
such contracts are often of a greater
importance for a smaller contractor.
Such contracts tend to be ‘too small’
for larger facility management
companies that we would normally
use in the large multi-let office
buildings.” ■While speculative developments are
still being taken through... planning...,
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proportion of the scheme is pre-let
Chris Narrowmore, Thomas & Adamson (below)Work on glazing
at 177 Bothwell
Street in Glasgow
is to begin
in AprilLochside Avenue, Edinburgh