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Reflections on the Clyde: Glasgow Property

by | Aug 31, 2018

Glasgow has been having an amazing year in 2018. Here’s why.

Whilst many of my colleagues have spent recent weeks jetting off to locations around the globe for their summer breaks, I spent a very enjoyable few days in Glasgow.  Whilst Edinburgh is usually the Scottish city most visited every August, thanks to the annual festivals, this year Glasgow had its own party, centred around the inaugural European Championships. This saw seven different sports come together for their main European competitions, at the same time and in the same city. It was like a mini-Olympics, and Glasgow put on an impressive show. There was a palpable buzz in the air and it was clear that this is a city that has a lot to be proud of in 2018.

The city’s property markets can join that celebration too. The city has seen record levels of take-up in the first half of the year, led by Clydesdale Bank signing for a new HQ and a major pre-let to HM Revenue & Customs. That was followed up by the recent announcement that Barclays would be setting up a new base in the city, creating 2,500 jobs. This will lead to the first major office development on the south bank of the Clyde, at Buchanan Wharf, since the move by BBC Scotland to Pacific Quay over a decade ago. In the first six months of 2018, with almost 594,000 sq ft acquired by occupiers, almost as much office space was taken than in the whole of 2017.

Investment is also going into infrastructure. Network Rail are currently underway with a major transformation of Glasgow Queen Street station as part of a larger improvement project of rail links between Edinburgh and Glasgow. The station frontage will once more be visible from George Square and West George Street. First impressions count: work on New Street station in Birmingham has been transformative, and changed the way visitors first encounter the city. The work at Queen Street has the potential to do something similar for Glasgow.

Meanwhile, the real estate investment market is also performing well, as our latest Scotland Property Quarterly highlights. The total returns achieved on Scottish office and industrial properties have both improved during Q2, and the Glasgow market has been one of the major beneficiaries. The average total return for Scottish real estate of 7.1% over the twelve months to the end of June 2018. Glasgow industrials have significantly outperformed this, with an annual total return of 16.2%, well ahead of returns in Edinburgh of 12.5%. The reverse was the case for office markets with Edinburgh (12.1%) outperforming Glasgow (7.9%). Nevertheless, the office market performance has steadily been improving as 2018 has progressed: in Glasgow they are now back to levels last achieved in early 2016.

So, from all angles, Glasgow is having a truly historic year. For a deeper dive click through to our Glasgow Office MarketView and Scotland Property Quarterly reports.

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