‘Uplift’ in commercial property market as workers return to office

The Aurora building

INVESTMENT into the Scottish commercial property market is seeing an ‘uplift’ as workers return to the office, new research has revealed.

Colliers revealed that several deals have seen a ‘bidding war’ take place.

Investment volumes in Glasgow have reached almost £150 million so far this year, with Colliers expecting this to rise ‘significantly’ in Q4.

The professional services and investment management company said demand for office properties that will meet the changing nature of working patterns are seeing particular demand, with increased collaboration space, a flexible desk layout approach, and cycling, showering and parking facilities of importance. Also under ‘considerable scrutiny’ are the ESG and sustainability credentials of assets.

Colliers highlighted a recent bidding war around its purchase of the Aurora building in Glasgow’s Bothwell Street from M&G, for European fund manager Forma Real Estate. The fully-let city centre property covers around 174,000 square feet and is Forma’s first UK acquisition.

Patrick Ford, director, national capital markets at Colliers in Glasgow, said, “Forma fought off stiff competition from a significant number of parties at the closing date for the Aurora building, regarded as the most high-profile value-add office opportunity in the UK regions for a number of years.”

Colliers is now calling for more clarity from the Scottish Government to help businesses get back to the office in a ‘safe and consistent’ way.

Patrick Ford added, “I would like to see our First Minister being more prescriptive around a plan for getting people back to the office and working with businesses to make this as smooth a transition as we all adapt to the ‘new norm’. Many corporates, such as financial services providers, have reaffirmed their commitment to the office. Office space remains essential for many sectors, in particular those that are highly regulated with specific security needs. Much needed clarity would allow for quicker decisions from both tenants and investors.

“There can’t be a ‘one size fits all’ approach. Investors are looking for office space that will encourage workers to return by offering them a flexible, attractive and safe environment.”