Business News Round Up (14/07/2022)
CBRE research reveals office market performance across Glasgow in Q2 2022
Take-up for the Glasgow office market totalled 135,155 sq ft in the second quarter of the year, which is up 9.6% from the second quarter of 2021, showing the market continues to recover from the impact of the pandemic. Total take-up for the year to date stands at 230,651 sq ft, 16.5% up against the same period last year. Furthermore, Glasgow’s twelve-month rolling average has increased, with 635,685 sq ft transacting in the past year, representing an increase of 61.88% against the previous twelve months. Glasgow witnessed two deals in the past three months that surpassed the 20,000 sq ft marker: Ovo Energy taking 33,905 sq ft at the recently complete Cadworks and serviced office providers WIZU letting 24,350 sq ft across three floors at 2 West Regent Street. Furthermore, there was more activity at ONYX on Bothwell Street with drinks manufacturer Diageo agreeing to let 12,438 sq ft across two floors. Office supply continues to rise within the city, but crucially best-in-class Grade A space remains at a premium. Out of the 2.895m sq ft of office space currently available in the Glasgow market, only 134,194 sq ft of it is considered Grade A, representing just 0.59% of all Glasgow office stock.
UK economy returns to growth thanks to holiday boom and GP visits
The UK economy unexpectedly returned to growth in May, fuelled by a boom in holiday bookings and a large rise in GP appointments. The Office for National Statistics said gross domestic product (GDP) rose by 0.5% on the month, after a revised 0.2% decline in April. City economists had expected zero growth amid fears over the impact from the cost of living crisis. Despite the overall rise in activity on the month, the latest snapshot revealed a decline in consumer-facing services driven by falling retail sales and a slump in sports activities and recreation. Industrial output rose 0.9% on the month, thanks to strength in the manufacturing sector, while the construction industry grew by 1.5%, helped by a rise in housebuilding activity and office refurbishment work. The ONS said health was the biggest driver as more people saw GPs, offsetting the winding down of the coronavirus test and trace and vaccination schemes. It said road hauliers also had a busy month, while travel agents and tour operators benefited from a sharp rise in bookings amid pent-up demand for summer holidays. GDP is the sum of all goods and services produced in the economy, including sectors such as health, education, and government. The economic contribution of GP visits and other health services where there is no market price is estimated by statisticians by counting activity. The figures come as airports struggle with booming demand for overseas travel as holidaymakers return to flying abroad after the easing of pandemic restrictions, with scenes of lengthy delays and cancellations across the country.
Manchester Airport Group loses £320m in the last 12 months
Manchester Airports Group (MAG) today reports its full-year results for the period 1 April 2021 – 31 March 2022. The results show the Group – which owns and operates Manchester, London Stansted and East Midlands Airports – served 20.5m passengers in 2021/22, up 225% year-on-year. Despite a marked increase compared to 2020/21, the fact travel restrictions were in place for 11 months of the period meant passenger volumes were still only equivalent to 33% of 2019/20 levels. With passenger numbers for the year remaining significantly lower than before the pandemic, and fixed costs for airport operations remaining high, MAG recorded an overall loss for 2021/22 of £320m. MAG’s combined losses for the last two years stand at £694m, with revenues down by 80% in 2020/21 and 48% in 2021/22 compared to 2018/19. Compared to last year, revenue and results from operations in 2021/22 were up 159% and 64% respectively. MAG is preparing for the aviation industry’s busiest period, as the peak summer season approaches. The Group expects passenger volumes over these months to increase to levels close to those seen in 2019, leading to a fuller recovery over the course of 2022/23.
Scotland takes top spot for equity investment in uni spinouts
Small businesses founded at Scottish institutions accounted for the highest number of equity investment deals to UK spinouts last year, according to new figures released by the British Business Bank. Of the 211 equity deals involving spinouts across the UK during 2021, 44 came from Scottish academic institutions – the highest figure of any region or devolved nation. The South East of England was second with 39 spinouts receiving funding, while the east of England and London had 35 and 32 respectively. It marks the second year in a row that Scotland has been the leading location for equity investment deals in university spinouts after recording 64 in 2020 – ahead of the South East and East of England at 41 each. The British Business Bank said equity investment in Scottish spinouts had continued into 2022. Deals announced during the first half of the year include an £8 million investment in Elasmogen, a biotechnology business spun out from the University of Aberdeen, and a £1.2m investment in WellFish Diagnostics, an aquaculture spinout from the University of the West of Scotland. The latest figures follow the publication of a new study which shows that university spinouts that have emerged from research council investments and receive funding from both the British Business Bank and Innovate UK are more likely to have better business and employment outcomes.