Prime Office Shortage Reshapes Scotland City Markets 2026

Key Points

• Scotland’s office sector is tightening at the top end, with occupiers competing for a limited pool of prime, city centre space
• Take-up is strengthening particularly in Glasgow, where more than 300,000 sq ft was let in the first quarter of 2026
• Average deal sizes have risen sharply in recent years, signalling a return of larger occupiers and more decisive commitments to space
• Shawbrook Bank and Sky have each taken more than 26,000 sq ft in central Glasgow
• EY has secured around 36,000 sq ft in Edinburgh at Haymarket Square
• Hybrid working has led to high demand for prime office space across Scotland’s cities
• Demand outstrips supply for prime office space in Scotland’s major urban centres

Glasgow (Glasgow Express) June 6, 2026 – Scotland’s office sector is experiencing significant tightening at the premium end, with business occupiers now competing intensely for a limited pool of prime, city centre office space.

According to Grant Thornton UK, as reported by the Grant Thornton team of Grant Thornton UK, hybrid working patterns have led to high demand for prime office space across Scotland’s major cities. This development marks a clear shift from the post-pandemic period when office vacancy rates were higher and occupiers had greater flexibility in their location choices.

The scarcity of prime office space is particularly evident in Glasgow, Scotland’s largest commercial centre. As documented by Grant Thornton in their May 2026 analysis, take-up is strengthening across the country, with Glasgow leading the trend where more than 300,000 square feet was let during the first quarter alone. This represents a substantial increase compared to previous quarters and signals renewed confidence from businesses in returning to or expanding within city centre locations.

How Are Average Deal Sizes Rising in Scotland’s Office Market?

Average deal sizes in Scotland’s office market have risen sharply in recent years, marking a clear departure from the period when smaller, more cautious leases dominated the market.

As noted by JLL in their May 2025 report, there was previously a trend where caution to commit saw average office lease size fall, with broader economic outlook concerns delaying decisions by office tenants. However, the current market demonstrates a significant reversal of this pattern.

The rise in average deal sizes signals a return of larger occupiers making more decisive commitments to space. This trend reflects growing business confidence and the willingness of major companies to secure substantial office footprints in Scotland’s prime locations.

Large occupiers are no longer hesitant about long-term commitments, choosing instead to lock in prime space before availability becomes even more constrained.

What Recent Transactions Underline the Trend in Glasgow and Edinburgh?

Recent commercial transactions in Scotland’s major cities underline the trend of larger occupiers securing substantial prime office space.

In Glasgow, Shawbrook Bank has taken more than 26,000 square feet in central Glasgow, demonstrating the bank’s commitment to the city’s commercial centre. Similarly, Sky has also taken more than 26,000 square feet in central Glasgow, reinforcing the media company’s presence in Scotland’s largest commercial city.

In Edinburgh, Scotland’s capital, EY has secured around 36,000 square feet at Haymarket Square. This transaction represents one of the larger office deals in Edinburgh’s recent market history and demonstrates the professional services firm’s commitment to maintaining a substantial presence in the city.

The size of EY’s space underscores the trend of major occupiers seeking significant footprints in prime locations rather than smaller, more dispersed offices.

These transactions collectively demonstrate that major companies across different sectors – banking, media, and professional services – are actively competing for substantial prime office space in Scotland’s city centres.

The consistency in deal sizes across these different organisations reinforces the broader market trend of larger occupiers returning with decisive commitments.

Why Does Demand Outstrip Supply for Prime Office Space in Scotland?

Demand outstrips supply for prime office space across Scotland’s major cities, creating a challenging environment for occupiers seeking premium locations. As reported by the Grant Thornton team of Grant Thornton UK, this imbalance between demand and availability is a critical factor reshaping Scotland’s commercial property markets.

The scarcity of prime space means that businesses willing to pay for top-quality locations face increased competition and potentially higher costs.

Several factors contribute to this supply-demand imbalance. First, the availability of genuinely prime office space has been constrained by limited new development in recent years. Second, the quality standards expected by modern occupiers have risen, meaning fewer buildings qualify as “prime” in the current market. Third, the shift toward hybrid working has concentrated demand on the highest-quality spaces, as companies prefer to bring employees to exceptional offices rather than average facilities.

The consequence of this demand-supply mismatch is that occupiers competing for prime space face a tightening market with limited options.

This situation particularly affects businesses that require city centre locations for client access, recruitment, or operational reasons. The competition for available space is driving increased activity in leasing negotiations and may lead to higher rental prices for prime locations.

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How Is Hybrid Working Driving High Demand for Prime Office Space?

Hybrid working has fundamentally transformed Scotland’s office market, leading to high demand specifically for prime office space rather than average facilities. As documented by Grant Thornton UK in their May 2026 insights, the shift toward hybrid work patterns has created a paradox where overall office utilisation may be lower, but demand for premium spaces has increased significantly.

Under hybrid working models, employees typically work from home for some days and from the office for others. This arrangement means that companies are using office space less frequently overall but expect the office experience to be exceptional when employees do attend.

As a result, businesses are prioritising investments in the highest-quality buildings with superior amenities, technology, and design rather than maintaining multiple average-quality locations.

This trend explains why demand is concentrated on prime office space specifically. Companies recognise that to attract employees to return to the office on hybrid days, they must provide exceptional environments that cannot be replicated at home.

Prime office spaces typically offer better transport links, superior building facilities, advanced technology infrastructure, and improved working environments that justify the commute for hybrid workers.

The result is that while overall office space requirements may have decreased, the competition for the highest-quality locations has intensified dramatically.

This dynamic particularly benefits Scotland’s prime city centre locations where the best buildings are concentrated, while potentially disadvantaging older or lower-quality office stock.

What Does Refurbishment Feasibility Mean for Market Resilience?

Refurbishment feasibility and strategic communication have become vital factors for market resilience in Scotland’s office sector, according to Grant Thornton UK’s analysis. As reported by the Grant Thornton team of Grant Thornton UK, buildings that can be feasibly refurbished to meet modern prime standards are better positioned to compete in the current tight market.

Many office buildings in Scotland’s city centres were constructed before modern working standards and environmental requirements became standard.

The question of whether these buildings can be feasibly upgraded to prime standards significantly affects their market value and competitiveness.

Buildings with good refurbishment potential can potentially join the limited pool of prime space, while those without feasible upgrade options may fall out of the prime category entirely.

Strategic communication between building owners, occupiers, and the market has also become crucial. Clear communication about refurbishment plans, completion timelines, and the resulting space standards helps maintain market confidence and enables occupiers to make informed decisions about their location choices. This transparency is particularly important in a market where demand outstrips supply, as it helps manage expectations and reduce uncertainty.

The focus on refurbishment feasibility reflects the practical reality that new office development in Scotland’s city centres is limited.

Upgrading existing stock represents the most viable path to increasing the supply of prime space, making refurbishment potential a critical factor in determining a building’s market position and long-term resilience.

Which Industries Are Most Active in Scotland’s Prime Office Market?

Several key industries are demonstrating significant activity in Scotland’s prime office market, particularly in Glasgow and Edinburgh.

The banking sector remains highly active, with Shawbrook Bank’s recent transaction of more than 26,000 square feet in central Glasgow demonstrating the sector’s commitment to prime city centre locations. Banking companies require substantial space for their operations and prioritise locations that provide excellent client access and recruitment advantages.

The media and technology sector is also highly active, as evidenced by Sky’s transaction of more than 26,000 square feet in central Glasgow.

Media companies like Sky require substantial office space for their operations and benefit from city centre locations that support recruitment and provide access to industry networks. The technology sector’s continued growth in Scotland supports ongoing demand for prime office space.

Professional services firms represent another major segment of active occupiers. EY’s securing of around 36,000 square feet at Haymarket Square in Edinburgh demonstrates the professional services sector’s continued commitment to substantial prime office space. Professional services companies require significant space for their teams and prioritise locations that support client meetings and recruitment of high-quality staff.

These three sectors – banking, media/technology, and professional services – collectively demonstrate the breadth of demand for prime office space across different industry types.

The consistency in their approach to securing substantial space in prime locations reinforces the broader market trend of larger occupiers making decisive commitments.

Background: The Development of Scotland’s Office Sector Tightening

The tightening of Scotland’s office sector at the prime end represents a significant evolution from the post-pandemic market conditions that prevailed in 2020-2023.

During the early pandemic period, office vacancy rates increased substantially as companies reduced their footprints and many employees transitioned to full-time remote working.

This period saw a general decline in demand for office space across all quality levels, with average office leases becoming smaller as companies adopted more cautious approaches.

The shift toward hybrid working models, which became standard by 2024-2025, began changing market dynamics. Companies recognised that while employees could work from home for some days, they still needed high-quality office environments for collaborative work, client meetings, and company culture. This recognition led to a concentration of demand on prime office spaces rather than average facilities.

By 2025, the market began showing clear signs of tightening at the prime end. JLL’s May 2025 report noted that caution to commit was still affecting average office lease sizes, with broader economic outlook concerns delaying decisions.

However, the market situation evolved rapidly into 2026, with Grant Thornton’s May 2026 analysis documenting that demand now outstrips supply for prime office space.

The specific transactions in Glasgow and Edinburgh during the first quarter of 2026 – including Shawbrook Bank, Sky, and EY – represent concrete evidence of this market evolution.

These deals, each exceeding 26,000 square feet, demonstrate that major occupiers are no longer hesitant about long-term commitments and are actively competing for substantial prime space.

The concentration of demand on prime space has created a bifurcated market where the best buildings face intense competition while older or lower-quality stock may continue to experience weaker demand. This market structure reflects the fundamental shift in how companies view office space under hybrid working models: the office must provide exceptional value to justify employees’ time commuting.

Prediction: How This Prime Office Shortage Will Affect Scottish Businesses and Workers

The shortage of prime office space in Scotland’s city centres will affect multiple stakeholder groups in the market, with varying impacts depending on their position and resources.

Impact on Large Corporate Occupiers

Large corporate occupiers seeking prime space will face increased competition and potentially higher costs. Companies like Shawbrook Bank, Sky, and EY that have already secured substantial space benefit from having locked in locations before the market tightened further. However, other large occupiers still seeking prime space will face a more challenging environment with limited availability.

These companies may need to accept higher rental prices, negotiate longer lease terms, or consider locations slightly outside the immediate city centre to secure adequate space.

The rise in average deal sizes suggests that larger occupiers are willing to make decisive commitments, but this approach requires substantial financial resources and confidence in long-term business prospects. Companies without sufficient resources may find it increasingly difficult to secure prime space, potentially limiting their ability to compete for talent and clients in Scotland’s major cities.

Impact on Small and Medium Businesses

Small and medium businesses (SMEs) seeking prime office space will face the most significant challenges in the current market. With demand outstripping supply for prime space, SMEs will likely face difficulty competing with larger occupiers who can commit to substantial space and longer lease terms. This situation may force smaller businesses to consider alternative options such as:

• Shared office spaces or business centres that provide prime locations without requiring large commitments
• Locations in secondary buildings that may offer better value but lower quality standards
• Smaller footprints in prime locations, potentially limiting their ability to grow
• Locations outside the immediate city centre, which may affect client access and recruitment

The concentration of demand on prime space may also lead to higher rental prices that disproportionately affect smaller businesses with limited financial flexibility.

Impact on Office Workers and Employees

Office workers in Scotland’s city centres will experience the effects of prime office shortage through changes in their working environments and potentially their commute patterns.

Companies that secure prime space can provide better working environments with superior amenities, technology, and design, which may improve employee satisfaction and productivity. However, the competition for prime space may also lead to:

• Higher rental costs that companies may attempt to offset through other measures
• Increased pressure on employees to utilise office space efficiently during hybrid working days
• Potential changes in location if companies cannot secure suitable prime space and must relocate to secondary locations

Workers seeking employment with companies that prioritise prime office locations may benefit from access to better facilities, but the overall market tightening could limit the number of companies able to maintain prime locations.

Impact on Property Owners and Building Developers

Property owners with prime office buildings will benefit from increased demand and potentially higher rental prices. Buildings that qualify as prime will face strong competition from occupiers, potentially leading to faster lease negotiations and reduced vacancy rates.

However, owners of older or lower-quality buildings will face challenges if their properties cannot be feasibly upgraded to prime standards.

The focus on refurbishment feasibility as a vital factor for market resilience means that building owners must consider investment in upgrading their stock to prime standards.

This investment may be substantial but could be necessary to maintain competitiveness in the tightening market. Building developers may find opportunities in developing new prime office space, though city centre development constraints in Scotland may limit new construction opportunities.