Glasgow critically lacks small office suites if it is to remain No.1 for start-up businesses in Scotland

30 November 2017

Start-ups and small businesses in Glasgow are struggling to find suitable offices as a lack of small office suites threatens to hamper the future growth of these businesses in the city, warns Savills. According to research from the firm, against an average annual office take-up of 45,000 sq ft in the 1,000 - 2,000 sq ft size band, only six month’s worth (28,000 sq ft) of small office suites remains available.

Yet despite this bleak backdrop, Glasgow is the leading city for start-up businesses in Scotland, with 7,845 new businesses launched this year according to data from StartUp Britain, compared to 6,635 in Edinburgh and 1,683 in Aberdeen.

A lack of options is pushing occupational costs up, with rents on lettings in the 1000 -2000 sq ft size bracket in 2017 11% ahead of 2016 levels on average, according to Savills, with some deals on the best small space fetching north of £20 per sq ft.

Meanwhile the firm goes on to explain this weight of demand from small businesses has helped give way to a rise in serviced office operators across the city including Nexus Business Space opening on West Regent Street, Spaces Charing Cross in Tay House on Bath Street and Clockwise Offices on Renfrew Street – all of which have launched in the last 18 months.

However, looking longer term, Savills says that with over 100,000 sq ft of availability in the 2,000 – 3,000 sq ft office size band, against a lower average level of annual take up (only 31,564 sq ft), landlords should consider sub dividing office suites to cater for the demand for sub 2,000 sq ft options that qualify for full small business rates relief.

Jacqui Morton, associate in the business space team at Savills Glasgow, comments: “Glasgow is a city people want to work in and businesses want to base themselves, and it is important we support these businesses and allow them to grow through the provision of suitable and affordable office accommodation. There is a severe lack of small office suites in the city and whilst we welcome the arrival of good serviced office options, this shortage combined with the increased rents being achieved makes a strong case for landlords to split larger 2,000 to 3,000 sq ft suites that are physically suitable.”

Cal Lee, head of Workthere, a new venture by Savills introduced to help businesses find flexible, co-working and serviced office space, adds: “Over the course of the last few years the UK in particular has witnessed considerable growth in the flexible work space sector, with many new entrants coming to the market. At the same time, demand for flexible work space continues to grow as more businesses including start ups, SMEs and even larger corporate companies are seeing the benefits of flexible work space over a more traditional lease.”

 
 

General Enquiries

Savills Glasgow

 

Key Contacts

Jacqui Morton

Jacqui Morton

Business Space Agent
Office Agency

Savills Glasgow

+44 (0) 141 222 4140

 

David Cobban

David Cobban

Director
Office Agency

Savills Glasgow

+44 (0) 141 222 4101