AN increasing number of commercial property landlords in Scotland’s major cities are “scrambling” to refurbish older buildings in a bid to meet demand for office space, according to research from Colliers International.
The latest Office Markets Commentary indicates that investors are increasingly looking to repurpose ‘Grade B’ city centre buildings to meet changes in working practices and plug the gap in new ‘Grade A’ office space.
Property investors in Edinburgh and Glasgow are showing increasing interest in both refurbishments and direct development, according to the Office Market Commentary 2016-18, amid growing demand for city centre offices around the UK. Companies are also increasingly looking for facilities to support work from home policies, desk sharing and cycling to work.
Douglas McPhail, head of Colliers International in Scotland said refurbishments that took Scotland’s changing working practices into account made office buildings far more likely to find an occupier.
“It is significant that employers are thinking much more about what their office workers’ expectations are when they look for premises and seek to make the office experience more attractive and engaging.
“Facilities for bikes, showers and lockers for cyclists and joggers; versatile and flexible office accommodation with a comfortable, almost leisure-like feel; common areas for break-out meetings and work, good Wi-Fi and perhaps a cafe; these are the kind of buildings that appeal to modern and agile business. Office buildings may now even achieve a ‘Bike Score’ which rates how cycle friendly they are.
“I don’t think this is a fad – I think it’s the way we are going to see people working and integrating with their work environment from now on.”
Mr McPhail added, “One of the issues is that in Glasgow and Edinburgh there is not enough supply of ‘Grade A’ stock – in fact in Glasgow it has all but run out. The lag in terms of building new offices is at least two, but probably three years. What we are going to see, therefore, is an increase in rents and a lot more interest in refurbishment of older buildings.”