Hope for Scottish commercial rental market

Times may be tough for the commercial property market, but there are signs of a revival in Scotland at least.

Office rentals are still very much in demand in Glasgow, as there is limited space available. Consultants are predicting that some firms will pay a record £28.50 per square foot to rent an office in the city centre.

Likewise in Edinburgh, rents are expected to reach £30 per square foot although it is possible the capital may soon have more office space than it can find tenants for if Lloyds TSB decides to close down the former HBOS headquarters as well as some its own offices after last week's £12bn takeover.

Alaisdair Humphrey, who will become the Managing Director of Jones Lang LaSalle in January, is optimistic about the future of the Scottish commercial rental market.

If the office market continues to hold up, Humphrey believes, it could push the rest of the market out of the slump as investors realise they can still get a return from offices in prime city centre locations. "From the office occupational side, the agency world here continues to be impressed with the position and take-up that continues", he said.

Humphrey said that in the first half of this year, JLL saw just 113 deals compared to 2,008 in the first half of 2007, although the average size of deals was lower. Clearly, the office rental market needs a confidence boost, and confirmation of tenant demand in Scotland could be just the thing.