Scotland

Thanks to its abundant natural resources and capacity to adapt to new economic trends, Scotland has become one of the most successful regional economies in the United Kingdom. Several Scottish cities have been listed among the country's best places to live and work, so it is hardly surprising that the region as a whole is seen as a highly desirable location to set up a business. In this article we take a look at the Scottish office accommodation market and at some of the area's top business locations.

Key office locations in Scotland

Edinburgh

Over the past 2 years, letting activity in the Edinburgh office market has been on the rise, following the significant decline experienced during the recession. City centre take-up totalled 750,000 square feet in 2013, and headline rental values remained stable at £27 per square foot. Vacancy rates have also remained unchanged at are currently set at 7.25 per cent. According to Knight Frank Estate Agents, in early 2013 there was an active requirement for 171,900 square feet of space in Edinburgh.

City centre areas like Haymarket, Quartermile, Caltongate, and Fountain Quay have emerged as the favourites among occupiers. In addition to these locations, the western part of the city (particularly near Edinburgh Park) and the Exchange District are attracting a great deal of attention from prospective occupiers. Edinburgh Park is in fact one of the largest business parks in the UK, employing nearly 20,000 people in sectors like finance, banking, and technology.

In 2013, nearly 225,000 square feet of office space were being developed in Edinburgh, mostly in the form of speculative developments in Morrison Street and Charlotte Square.

Office space available in Edinburgh

One of the most important speculative developments that has been recently completed in the city is Atria, a project that was funded by the City of Edinburgh Council, which consists of 2 brand new office buildings offering 200,00 square feet of prime floor space.

Glasgow

StartUp Britain listed Glasgow among the top-five most entrepreneurial cities in the UK. To accommodate the needs of the growing number of businesses, there are nearly 27 million square feet of office space in and around the city, 60 per cent of which are in Glasgow's city centre. This makes the city Scotland's largest office market. Take-up rates for Grade A space have been growing exponentially since 2009, and availability has halved to barely 208,000 square feet. The diminishing supply of prime office space is being tackled by the Scottish Government, which has recently launched the £48 million initiative known as SPRUCE, which aims to regenerate urban space to satisfy the growing demand. Likewise, the completion of the International Technology and Renewable Energy Zone, along with office developments in Regent Street, Queen Street, and St Vincent Plaza will add 500,000 square feet of new office stock.

Office space available in Glasgow

Prime rents in the city centre average £27.50 per square foot, whereas in out-of-town locations they are in the region of £15 per square foot.

Aberdeen

Scotland's third largest city has recently been making headlines. A 2013 report carried out by PricewaterhouseCoopers ranked Aberdeen in second place in terms of its competitiveness indicators. For years, the oil and gas industry has dominated the local economy, and by 2022 a further 120,000 jobs could be created in this sector. These growth levels will inevitably result in increased demand for adequate office space in the city. Soaring demand is already a reality, especially since there is currently no Grade A office space available in the city centre. During the last quarter of 2012, active demand grew to 350,000 square feet, which represents a 28 per cent year-on-year increase. Despite this, during 2013 the city experienced a 142 per cent increase in the number of transactions, with annual take-up rates reaching the 886,000 square feet mark and clearly outperforming other national markets.

At £31.50 per square foot, prime rental values in Aberdeen are among the highest in the country. The most sought-after locations are the areas of Kingswells (where more than 400,000 square feet of office space were recently let) and Westhill.

Office space available in Aberdeen

Investment in office stock exceeded £200 million in 2012, with KPG Property Developments being one the major players in the local property market. Knight Property Group is another important speculative developer in Aberdeen, as it has already has three office developments being built in Westhill, Wellington Road, and at the City View business park.

Aberdeen's out-of-town office accommodation is centered around Stoneywood business park (offering office units of up to 125,000 square feet) and Aberdeen Gateway (offering 20,000-square feet units). The 1 million-square feet site at Aberdeen International Business Park is currently under development and is expected to be completed during the first quarter of 2015.