LONDON, July 1, 2019 /PRNewswire/ -- A lack of new development and Grade A space in Glasgow are key factors in a surge of flexible workspace operators entering the market in the past year according to new research from flexible workspace advisors GKRE.
The lack of new development in the city has resulted in the vacancy rate for offices in the city centre falling to 9.9% and rents reaching record levels of £32.50 per sq ft for new Grade A offices and £30 per sq ft for the best refurbished space.
As a result, flexible workspace operators including Regus and Orega, as well as local independents are helping to fill the void, providing occupiers with the flexibility they are increasingly demanding.
The growth of flexible workspace in Glasgow is the result of its vibrant economy. In 2014, Glasgow negotiated the biggest city funding deal in UK history - giving the city freedom to spend public money in order to generate growth. Glasgow was able to secure capital investment of over £1.3bn into the city-region over 10 years. Over the next 20 years, this is set to bring an estimated £3.3bn of private investment into the city.
The positive outlook for Glasgow's economy has coincided with a rise in office lettings in 2018, with a total of 1,425,419 sq ft of space let to new tenants, representing a 127% rise on 2017.
To profit from the growth in flexible workspace, GKRE noted that a growing number of property owners are embracing joint venture management agreements with operators, allowing them to utilise the expertise of the operator while reaping the rewards made available by flexible workspace. A recent illustration of this is a deal where GKRE advised the landlords EPIC on a 10-year management agreement on 29,929 sq ft of space with flexible office operator Orega.
Douglas Green, Director at GKRE, said: "Given the vibrancy of Glasgow's flexible office sector, we expect many more operators and landlords to form partnerships to capitalise on the sector's strong growth."
GKRE are flexible workspace specialists, bringing their wealth of expertise to operators, landlords and agents who are looking to act, merge and acquire flexible office space. GKRE have advised on over 1m sq. ft. in deals across 78 business centres.