CBRE Research reveals office market performance in Final Quarter of 2023 

Glasgow city centre

LEADING real estate advisor CBRE has released its latest figures on the key office markets in Scotland during the final quarter of 2023.

While take up was slightly down on the previous three months, Edinburgh and Glasgow are showing positive signs of recovery with significant requirements for space from large corporates and a growing demand for flexible office space for companies bringing employees back to the office.

Angela Lowe, Senior Director at CBRE added: “The Scottish office markets are continuing to perform well with demand for flex space in particular continuing to be high, with operators reporting a significant number of new viewings every day. With some of the newer flex spaces offering services like beer on tap and in-house baristas, it’s easy to see the attraction of these centrally located workspaces for companies keen to lure reluctant employees back to the office.

“Demand for best-in-class offices with strong sustainability credentials also continues to grow from occupiers, particularly large corporates.”


Despite a slightly subdued end to the year, a renewed sense of optimism is returning to the Edinburgh office market, according to Lowe.

She says that although there was a small dip in space taken in the final quarter of 2023, she expects 2024 to be a strong year for the capital as more businesses encourage their employees back to the office full-time and the economy continues to stabilise.

The latest research shows that 157,807sq ft of office space was taken up in the Scottish capital in the final quarter of the year – down 3% on Q3. In total 618,148 sq ft was let during 2023, fuelled by demand from the financial and professional sectors.

Although below the 10-year average, Lowe says this figure is broadly in line with the 5-year average and that it shows consistent take up of new stock and regears throughout the city, with further deals done on the best suites in West Edinburgh.

She said: “While the actual square footage was down slightly on Q3, there were a significant number of deals – 51 – in the final three months of the year.

“This brings the end-of-year total to 165 new transactions, up 13% on the previous year, and indicates the growing confidence in the Edinburgh office market.  The fact that many of these were high-value lettings to global companies shows just how robust the market is now, despite the economic turbulence the UK has experienced in recent years.”

Major lettings in Q4 included Atkins, Buro Happold, and TLT LLP at New Clarendon at 114-116 George Street, accounting for a total of 15,723 sq ft.

At Capital Square in Edinburgh’s Exchange District, LGT Wealth Management secured the remaining suite of 9,400 sq ft. Rents at the sought after development have been consistently increasing over the past 15 months according to Lowe, aligning with the overall pattern of rental growth observed across the city,

Meanwhile in West Edinburgh, transactions totalled 37,000 sq ft for Q4, accounting for 20% of the total take up which has been a constant throughout 2023. Further deals completed at 1 New Park Square, with Sainsbury’s Bank taking tenancy of the 19,000 sq ft top floor suite at a new headline rent for Edinburgh Park and Aptia taking over 8,000 sq ft at Verdant.

Prime rents in Edinburgh have maintained stability at £43 per square foot. However, CBRE forecasts rents will grow by in excess of 10% over the next three years, as demand for the best accommodation intensifies. In the city centre, the vacancy rate of prime Grade A office space is now just 0.46% and the Grade A vacancy rate is 3.4%. The Edinburgh-wide Grade A vacancy rate is currently sitting at 5.40%.

Lowe added: “Although there was no rent growth observed in the final quarter, there has been significant growth in rental tone throughout the city. Approximately 45% of the total number of deals transacted at £35 plus per square foot, which represents an increase of 17% compared to 2022 and a remarkable 56% compared to 2021.

“We think rents will edge upwards in 2024, driven by the very low Grade A vacancy rates and a shortage of good quality space, particularly as further stock has been removed from the market for conversion to other uses.

“This year could be the one where we see the return of the creative industries to the office sector, as they move from short term leases and managed office spaces to more permanent solutions.”


Although Glasgow saw a growing number of medium to large occupiers leasing new offices towards the end of year, annual take up for 2023 was down by 6% at 429,948 sq ft.

However, there are some signs of recovery in Scotland’s largest city according to Sarah Hagen, Director at CBRE in Glasgow, with over 100,000 sq ft of deals near completion throughout the city.

Hagen said: “Although demand in Glasgow currently sits at around 700,000 sq ft which is back to post-pandemic levels, many occupiers have been reviewing the market for some time.  Once key lettings come forward in the early stages of 2024, we anticipate a surge in activity from those occupiers who once thought they had time on their hands, as supply continues to reduce and competition for best space increases.”

The final quarter of the year witnessed office take-up totalling 97,528 sq ft. Of these, nine transactions were for floorplates greater than 10,000 sq ft – a vast improvement on the previous year according to Hagen. She says it suggests that corporates are making positive steps to engage in the market, as they gain more confidence in embracing hybrid working following the Covid-19 pandemic.

However, with the total number of deals for 2023 topping out at 150, Hagen says demand for offices under 2,500 sq ft continue to dominate the Glasgow market.

She said: “There is a big appetite for ready turnkey and flex space, a trend that is no doubt here to stay. Serviced office operator Cubo recently took its first step into the Glasgow market by securing a 19,000 sq ft lease at Aurora in Bothwell Street, which could wake up other new entrants to the potential of the city.”

Other deals witnessed industrial energy company Aggreko acquiring 8,800 sq ft on the 7th floor at Sentinel and Citizens Advice Scotland taking 5,000 sq ft at Portland House. Significant re-gear activity was completed as the Scottish Ministers continued their near 100,000 sq ft occupation at Atlantic Quay and legal giants CMS re-committed to the city on 20,874 sq. ft at 1 West Regent Street.

Hagen added: “Flight to quality continues to be the key trend throughout Glasgow. Appetite for best-in-class space, mixed with the demand for top ESG office credentials, will in turn escalate prime rents and the prediction that the £40.00 per sq ft barrier will be breached by the end of 2024 now seems likely in the face of dwindling Grade A supply.

“With New Build Grade A vacancy rates of just 2.89% in Glasgow, it’s clear that without new development, the Glasgow office market will soon face a real imbalance. However, this creates exciting opportunities for landlords, developers, and investors to reposition buildings and deliver new schemes to reap the benefits of that demand.”

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