06. Februar 2012 
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Aberdeen continues to outperform UK counterparts
Aberdeen is continuing to outperform both its Scottish and UK counterparts. While demand through the second half of 2011 in Aberdeen has not been as high as through the first half of the year (down 43%), the total floorspace taken since July boosts the total for the year leading to one of the strongest years in recent times and 96% more than last year’s total. This was reported in the Regional Offices H2 2011 MarketView from CBRE (Scotland). In Edinburgh take-up in the second half of 2011 was down slightly from the first half of the year. However, while the total for the year is 8% down from 2010, it is still slightly above the five year annual average take-up.
The picture in Glasgow is slightly less positive with take-up over the second half of 2011 down 15% in comparison to the first half. Total CBD (Central Business District) take-up for the year was also down by 37% compared to 2010.
Supply continues to come under pressure in Aberdeen with just 748,813 sq ft remaining available at the end of 2011. Actual ready-to-occupy Grade A space stands at just 29,782 sq ft in Aberdeen which is situated over a handful of buildings. The continued lack of supply is putting strong pressure on rents; the latest deal to law firm McGrigors is rumoured to be at £31.50 per sq ft, which is the highest Scottish rent achieved in 2011.
In Edinburgh available space increased by just 1% in the last six months of the year to now stand at 2.75m sq ft. However, once again the real story is the lack of available good quality, Grade A stock. In light of declining Grade A stock, Edinburgh is one of the only regional centres with speculative development currently under construction; 190,000 sq ft is available at the City Council-owned Atria on Morrison Street. There has been strong interest from occupiers in this property despite not being due to complete until Q1 2013. Rents in Edinburgh are currently static at £27.50, with incentives of circa 33 months on a straight 10 year lease.
Total available office stock in Glasgow’s CBD is up 5% from the end of H1 but this total disguises the quality of stock as new Grade A supply is down 8% compared to six months ago and 22% from the same period last year. Prime rents during the second half of 2011 remained stable at £27 per sq ft with incentive packages in the range of 24-27 months rent free, on a clear ten year term.
There have been six office investment transactions in Aberdeen in the last six months totalling c£30m. This compares to two transactions in the first half of the year totalling c£61.5m. The most significant transaction of the year occurred in the second quarter when Aerium purchased the new 125,000 sq ft iQ for c£50m.
The office investment market in Edinburgh has been subdued in 2011 with very limited activity. This is largely due to availability and no newly developed stock becoming fully let to release new investment product. Owners of new stock are focusing on lettings rather than considering an exit of part let buildings.
After an extremely quiet period of investment activity across the second half of the year in Glasgow, the market has been bolstered by the decision of DTZ Investment Management to sell 141 Bothwell Street. Completed in February 2009, this 175,000 sq ft building with tenants including Shell, McGrigors, PWC, HSBC and BNP Paribas, attracted at least five offers by closing date. It was eventually purchased by Pramerica for £71m.
The picture in Glasgow is slightly less positive with take-up over the second half of 2011 down 15% in comparison to the first half. Total CBD (Central Business District) take-up for the year was also down by 37% compared to 2010.
Supply continues to come under pressure in Aberdeen with just 748,813 sq ft remaining available at the end of 2011. Actual ready-to-occupy Grade A space stands at just 29,782 sq ft in Aberdeen which is situated over a handful of buildings. The continued lack of supply is putting strong pressure on rents; the latest deal to law firm McGrigors is rumoured to be at £31.50 per sq ft, which is the highest Scottish rent achieved in 2011.
In Edinburgh available space increased by just 1% in the last six months of the year to now stand at 2.75m sq ft. However, once again the real story is the lack of available good quality, Grade A stock. In light of declining Grade A stock, Edinburgh is one of the only regional centres with speculative development currently under construction; 190,000 sq ft is available at the City Council-owned Atria on Morrison Street. There has been strong interest from occupiers in this property despite not being due to complete until Q1 2013. Rents in Edinburgh are currently static at £27.50, with incentives of circa 33 months on a straight 10 year lease.
Total available office stock in Glasgow’s CBD is up 5% from the end of H1 but this total disguises the quality of stock as new Grade A supply is down 8% compared to six months ago and 22% from the same period last year. Prime rents during the second half of 2011 remained stable at £27 per sq ft with incentive packages in the range of 24-27 months rent free, on a clear ten year term.
There have been six office investment transactions in Aberdeen in the last six months totalling c£30m. This compares to two transactions in the first half of the year totalling c£61.5m. The most significant transaction of the year occurred in the second quarter when Aerium purchased the new 125,000 sq ft iQ for c£50m.
The office investment market in Edinburgh has been subdued in 2011 with very limited activity. This is largely due to availability and no newly developed stock becoming fully let to release new investment product. Owners of new stock are focusing on lettings rather than considering an exit of part let buildings.
After an extremely quiet period of investment activity across the second half of the year in Glasgow, the market has been bolstered by the decision of DTZ Investment Management to sell 141 Bothwell Street. Completed in February 2009, this 175,000 sq ft building with tenants including Shell, McGrigors, PWC, HSBC and BNP Paribas, attracted at least five offers by closing date. It was eventually purchased by Pramerica for £71m.
