INVESTMENT in Glasgow’s commercial office space has surged to £198m so far this year.
Knight Frank, an independent commercial property consultancy, reported a 46% increase from 2023’s total, and signalling strong recovery despite recent economic challenges.
The company confirmed that the total investment in Glasgow office assets has already surpassed last year’s £136m, topping the city’s five-year average of £195m.
Knight Frank has advised on £128m in office transactions so far in 2024, representing 65% of the market’s total activity to date.
This influx has included 14 significant transactions, up from 11 last year, reflecting renewed confidence in Glasgow’s office market.
Noteworthy deals this year include Knight Frank’s acquisition of 1 West Regent Street, as well as the sale of key office buildings at 122 Waterloo Street, Morgan Stanley’s critical Glasgow hub, and 220 High Street in Collegelands, which is government-occupied.
By mid-2024, office deals had already reached £100m compared to £66 million at the same point last year.
Glasgow has secured the highest volume of second-quarter deals among the ten UK cities in Knight Frank’s mid-year review, with £77m.
John Rae, head of office at Knight Frank Glasgow, expressed cautious optimism for the market’s trajectory.
He said: “There are positive signs returning to the Glasgow commercial property market.
“We are already ahead of 2023 in terms of investment volumes with a quarter of the year still to go.
“With a more stable environment and more stock likely to become available, there is a sense of cautious optimism for the remainder of 2024 and going into 2025.”
A noticeable trend this year has been a rise in investment interest from French firms, which Rae attributes to UK property’s favourable value compared to other European markets.
Corum Asset Management’s acquisition of 1 West Regent Street was highlighted as an example of the increasing French interest in Glasgow’s office properties.
Rae added: “We expect to see more interest from France in future sales.”
Douglas Binnie, Knight Frank’s capital markets partner in Glasgow, acknowledged current market challenges but noted an uptick in deal flow.
He said: “Conditions are still challenging, but there is a steadier flow of deals coming through in Glasgow.
“There are signs that investors are more willing to dip their toes in the market, with price expectations converging on both the buyer and seller sides.
“Interest rates being on a downward trajectory and a clearer sense of policy direction for the next five years should provide more a supportive backdrop for the months ahead.”
The year-to-date investment volume and new interest from international markets indicate a robust end to 2024 for Glasgow’s commercial property sector, with sustained growth expected into the new year.
