According to the latest Scottish Office Market Spotlight from Savills, leasing activity for the first half of 2017 across Aberdeen, Edinburgh and Glasgow reached 1.4 million sq ft, 20% above the five year half year average, boosted by accelerated leasing activity in Aberdeen and the strongest office take-up ever recorded in Edinburgh.
A robust leasing market is one of the factors that is leading the 25-50 basis points gap, which previously existed between office yields in Scotland’s investment market and the rest of the UK’s regional office markets, to show signs of closing, says the firm.
Aberdeen
Take up in Aberdeen during the first half of 2017 reached 238,000 sq ft, already exceeding the 2016 full year level (231,000 sq ft). Savills says 78% of activity was accounted for by the engineering, extraction and utilities sector, up from 17% last year, as the city benefits from the increase in oil prices. Leasing activity has seen office supply fall 3% from the end of 2016, however 2 million sq ft remains available, notes Savills, and speculative developments expected to complete during the second half of 2017 will add to this.