Eaton Corporation has obtained new offices in Glasgow.
Moving from Tay House on Bath Street, the power management solutions company has taken up a sixth-floor suite, spanning 1,720 square feet, in the newly refurbished Onyx Building on Bothwell Street.
Onyx now has a new entrance and reception area with cafe, air conditioning and LED lighting, as well as wellness facilities in the basement.
Hannah Lowe, assistant surveyor at CBRE, who represented Eaton in the transaction, said: “Eaton is a global player in the electricity sector and needed a prestigious workplace for its relocated office in Glasgow – I’m sure that the team will find the new space in Onyx to be an ideal fit.
Stefano Joannidis, Chief Financial Officer of Eaton in Glasgow, added: “We are extremely happy and delighted to move into our new offices in Onyx – it will perfectly match our current needs and provide the right working environment for our Glasgow team. .
Take-up for the Glasgow office market totaled 115,825 square feet in the last quarter of the year, according to CBRE – down from the previous quarter, but up 33.5% from the same period in 2020.
A total of 42 rentals took place in the area, the largest being another pre-letting at 177 Bothwell Street; Transport Scotland has occupied nearly 50,000 square feet in the new development.
Other notable deals include The Wise Group taking 6,667 square feet in Templeton on the Green and Experian leasing 5,249 square feet from McLellan Works.
CBRE data showed that 603,000 square feet of office space was traded during the year – and while that figure is below the city’s long-term annual average, it does indicate growing confidence in the city.
Its report showed that 128 businesses took up new premises in the city in 2021, 42 more than the previous year.
The notable increase in the number and volume of transactions for the year led to the conclusion of larger transactions, with seven transactions exceeding 20,000 square feet in 2021. The largest was the pre-lease of 75,000 square feet of The Student Loans Company at Buchanan Wharf.
Although office supply has increased slightly, the demand for the best Class A space in the city remains evident – numerous pre-lettings at 177 Bothwell Street have confirmed this trend.
Class A supply in the city therefore remains limited, with only 0.64% of Glasgow’s entire office stock (2,252m²) currently considered to be Class A vacant space. With several higher requirements already on the market for 2022, he expects the small available Class A space to process quickly.
The lack of Class A supply has put pressure on rents. Prime office rents are at an all-time high of £35.25 per square foot, with secondary rents also rising at a much faster rate than before, as many developers are forced to renovate old space due to the lack of new developments coming out of the ground.
Martin Speirs, Associate Director of CBRE in Glasgow, said: “As 2021 drew to a close, the Glasgow office market has recovered strongly from the effects of the pandemic in 2020 and the outlook for the year ahead looks even better.
“2022 is shaping up to be an exciting year with strong demand expected to continue, particularly for best-in-class buildings and those that can meet occupiers’ growing focus on ESG credentials.”
Office take-up in Edinburgh totaled 294,441 square feet in the last quarter of 2021, up 101.8% from the previous quarter and 77.7% from the five-year average in the fourth quarter. This brought Edinburgh’s total demand for the year to 688,238 square feet.
Premium spaceflight remained the trend for the remainder of 2021 with Category A support in the last quarter totaling 187,996 square feet.
Notable transactions included the leasing of the recently completed 2 Freer Street in Fountainbridge, in which Fanduel acquired the entire building, comprising 59,000 square feet. There has also been other activity at the Haymarket development where Capricorn, Shepherd & Wedderburn and Deloitte have all taken up space. totaling 78,610 square feet.
The vacancy rate for the new Grade A city center is just 0.69% with extremely limited supply on the horizon. There have also been notable sublets, with User Testing taking 13,682 square feet from Exchange Crescent and Unity Technologies acquiring 8,950 square feet from Capital House.
Prime rents in Edinburgh have risen throughout the year which can be attributed to the tight supply of new Grade A developments and the flight to quality space in response to factors such as the ESG and employee well-being. Prime rents are currently at £38.50 per square foot, but this is set to rise in the coming months with rents of £40 per square foot on the best realized space in the new Haymarket development.
Office take-up in Aberdeen in the fourth quarter was the strongest of the year, with 91,000 square feet handled in 14 transactions between October and December, an increase of 77.3% over the previous quarter.
However, with ongoing Covid restrictions, Aberdeen has struggled to recover at a faster rate than other major cities in Scotland, as many businesses continue to delay decisions on property strategy until that the measures are relaxed and that the real impact of hybrid working is assessed.
Total office space occupancy for 2021 was 197,914 square feet, 47% below the five-year average and Aberdeen’s lowest level of office occupancy since CBRE records began.
The biggest deal in the quarter and 2021 as a whole was for the former Chevron House on Rubislaw Hill, where Ithaca Energy agreed to buy its 96,357 square foot headquarters, having originally planned to downsize the building.
Other notable deals for 2021 include MRS Training & Rescue taking 18,264 square feet at Aberdeen Innovation Park, Mental Health Aberdeen taking 11,827 square feet at Langstane House and HSE/The Met Office closing on 11,237 square feet at Aberdeen International Business Park in the first trimester.
The supply continued to increase at the end of the year. There are currently 2,793m² of office space available in Aberdeen, representing a total vacancy rate of 27.93%. Class A space remains at the premium, however, as new stock continues to prove popular with occupants. There is currently only 491,527 square feet of available Class A space in Granite City, representing a vacancy rate of 4.92%.
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