The ‘new’ office 2021
Aasia Mohammad, Director at Lambert Smith Hampton (Scotland) recently chatted to NovaLoca about regional office take up, Grade A supply and the new office of the future.
“What a year 2020 was; one that most in the office circle will be pleased to see the back of. But while talk of the ‘death of the office’ has made for dramatic headlines, it couldn’t be further from the truth. Innovation, socialising and collaboration are high on the agenda for 2021 and the ‘new’ office will play a significant part in all of these.
Significant improvements in regional office take-up after Q2, and evidence of how well rents were paid throughout the pandemic are testimony to the high importance occupiers attach to the workplace. With vaccines on the horizon, attention is turning to when and how people will return to the office.
There is no doubt the world has changed significantly. The greater acceptance of remote-working will fast-track the evolution of the office, emphasising quality over quantity in occupiers’ space needs. The pendulum has swung to the tenant’s favour, and landlords simply must adapt. The challenges for occupiers, small or large, will be restrained capital budget.
Those landlords that can be flexible and go beyond the conventional will attract the very best occupiers.
With availability of grade A space muted in most markets and renewed caution around speculative development, the regional markets are in much better shape than previous recessions. Yes, we will see grey space enter the fold, and some occupiers will benefit from some fantastic sub-let opportunities as others look to reduce liabilities.
Regarding the specific Glasgow Market, despite a recent weakening of occupier activity, availability continues to diminish and stands at a record low of 1.4m sq ft. The choice of immediately available grade A options remains stubbornly low, with only the refurbished Ink Building (35,000 sq ft), 55 Douglas Street (55,000 sq ft) and 100,000 sq ft of tenant released space at various buildings across the city ready for immediate occupation. Further tenant released space is expected to come forward as some occupiers make moves to consolidate where they have multiple floors of a building.
However, grade A supply has improved tangibly during 2020, to stand at 384,000 sq ft, fuelled by the forthcoming completion of several new developments. Despite delays due to COVID-19 and tighter construction restrictions in Scotland, works on all sites are ongoing. Currently there is just under 500,000 sq ft of much needed new grade A stock due to complete in the next 12 months, of which 55% is available.
Corporate occupier requirements remain active from companies private and public sector bodies but many are reviewing their needs, and requirements could decrease in quantum. Active plug and play requirements are leading to an increase in landlords adapting and an increasing plug and play offering to attract new occupiers”.
Take a look at the commercial property listings from Lambert Smith Hampton (Scotland) on NovaLoca here.