Office market bruised by virus

Property firm CBRE said the coronavirus emergency had injected “substantial uncertainty into the market for an unknown period of time” as it reported a positive start to 2020 for the office sectors in Edinburgh and Glasgow.

Stewart Taylor, head of the firm’s Scottish office agency business, said: “With the 2019 general election and Brexit uncertainty out of the way and the election of a new government with a significant working majority, the early part of the year saw a palpable air of confidence returning to the Edinburgh and Glasgow business community, notwithstanding that a UK/EU trade deal has yet to be agreed.

“This has, of course, been significantly impacted by the effects of the coronavirus pandemic which began to take hold at the end of the first quarter. While this injects substantial uncertainty into the market for an unknown period of time, we have received encouraging evidence from our colleagues in the Far East which suggests that their markets are recovering post-lockdown.”

His comments came as figures from the firm showed that first-quarter take-up in Edinburgh saw a significant increase on the previous three-month period – rising 35 per cent to 130,640 square feet.

Although 32 per cent below the five-year average, this was partly attributed to a shortage of supply across the market which continues to squeeze headline rents and incentives.

In Glasgow, take-up for the city centre office market was down on recent years at 89,388 sq ft for the first quarter of 2020.

Alistair Urquhart, a director at CBRE in Glasgow, noted: “Prior to Covid-19, the underlying demand for prime office space in the city remained strong and we have yet to understand the full impact.”

Knight Frank recently said coronavirus was set to have a “significant effect” on Edinburgh’s office property market for the remainder of 2020.