By Guy Marsden, a founding director of Highbridge Properties PLC
AS a commercial property developer, my natural instinct whenever I go into a city is to look up – you really can tell a lot about its economic health by counting the cranes in the skyline. Glasgow is one city that is witnessing a significant ‘purple patch’ with large occupiers, including Barclays, Morgan Stanley, HMRC and Clydesdale Bank, choosing to expand in the city. As a result, confidence in the market is soaring.
In fact, the entire Scottish office market is growing, attracting over £1bn of investment last year alone. While Edinburgh and Glasgow account for 70% of investment in the sector, Glasgow’s popularity in particular is causing an emerging shortage of large floorplate office space.
At Highbridge Properties, we have developed out over 13 million square feet of employment space across the UK, with our exemplar scheme being Cobalt Park– the largest office park in the UK, comprising some 2 million sq ft and bringing 14,000 jobs to the area. The site has drawn significant employers to the region including Accenture, Santander and EE. Earlier this year we concluded the largest office letting ever in the UK’s north east when we secured Sage to take 200,000 sq ft of space at Cobalt Park.
Several years ago, Highbridge saw the same huge potential from making a major investment in the Glasgow office market. Our development Magenta, in partnership with Clyde Gateway, is a 20 acre urban business park, positioned on the River Clyde, only two miles from the city centre and well-connected by rail, road, cycle and walking routes to the city centre and outlying commuter towns.
It has already proven to be a great success. The first speculative building, Red Tree Magenta, was fully let as soon as it was completed. It is home to 30 occupiers, has brought 170 jobs to the area and companies range from solo new-start businesses right through to larger established firms, all of whom have recognised the growing demand for flexible and collaborative workplaces and enhanced office specification and services.
With such keen demand for office space in the city, there is now an increasingly limited supply of high quality, large floorplate options. According to a Grant Thornton research report, there are currently only seven buildings in the city centre that are capable of providing larger than 1858 square metres with floors larger than 929 square metres. Importantly, the wider Magenta development is one of the very few in Glasgow that has further capacity for large floorplate office accommodation that the city so desperately needs.
One of the main reasons why more and more businesses are choosing to call Glasgow home is the growing hotbed of talent – the life blood of any business. Access to a diverse range of skills is vital to harnessing real business growth and Glasgow has this in spades. The city has some of the best universities in the country and the good news is the talent is staying put, with one of the highest graduate retention rates of all UK cities at 46%.
Significantly, there is a plentiful and highly skilled labour pool. Within the Magenta commuter catchment alone, there are a staggering 954,514 people of working age to draw upon, representing 67% of the total population. The sheer diversity of talent is incredible with high levels of ‘professional’ occupations providing a good skills base for more senior level roles, high levels of ‘sales and customer services’ occupations for people carrying out back-office functions, combined with lower skilled occupations to provide a well-rounded offering.
The growth of financial services and professional services in Scotland is also having an impact on the office sector and Glasgow is particularly dominant with the insurance and accountancy industries. Over the past 20 years, gross value added (GVA) in Glasgow from financial and professional services increased by 136%. New areas of growth are also emerging in the city, in particular in the professional, scientific and tech industries, which have enjoyed nearly 20% growth over the past five years and a further 4,000 jobs in these industries are projected for the years to come.
The face of the city is changing and Glasgow is quickly accelerating to the top of the wish list for UK businesses and investors alike – attracted by the city’s diverse economy and strong occupational market dynamics. The outlook for any business choosing to locate to or expand in Scotland’s largest city looks very bright.