Edinburgh has the most productive retail floorspace of any major UK city outside of London, with Glasgow close behind, as Scotland’s two largest cities continue to demonstrate their attractiveness as retail destinations, according to new analysis from Knight Frank.

The independent commercial property consultancy found that Edinburgh achieves a retail sales productivity rate of £560 per sq. ft., while Glasgow’s is £499 per sq. ft. They place first and fourth, respectively, among the nine cities tracked, Manchester was second at £532 per sq. ft. and Leeds third at £503 per sq. ft. and was well above the average of £432 per sq. ft.

A higher productivity figure indicates strong sales volumes measured against the city’s amount of retail floorspace, while a low number suggests under-performance and/or an oversupply of accommodation.  

Both outperformed the UK average of 2.3% for underlying retail rental growth last year, with Glasgow delivering 5.3% and Edinburgh 3.0%. During 2024, Glasgow had the highest prime rent of £295 per sq. ft., while Edinburgh has been catching up at £280 per sq. ft. a 24.4% year-on-year rise. However, in the year to date, Glasgow has gone on to cross the £300 per sq. ft. threshold.

Despite the introduction of the St James Quarter in June 2021, which added 850,000 sq. ft. of retail floorspace, Edinburgh still has the lowest total volume among the UK’s major conurbations at 2.12 million sq. ft. Glasgow was third with 2.99 million sq. ft., while Birmingham and Liverpool occupied the top two spots.

Edinburgh’s limited space was reflected in its retail vacancy rate, which at 11.8% was the lowest outside of London. Meanwhile, Glasgow also performed better than the 18.2% average, with 16.6%.

Stephen Springham, head of retail research at Knight Frank, said: “Scotland’s central belt continues to show strength as a retail destination, despite the well-publicised challenges of the last few years. 

But, rather than city centre or shopping centre retail space being where there is an over-supply, our research suggests it is out-of-town pitches that are more challenged and where change of use is most likely to follow. The question is whether this floorspace is viable for alternative use.”

Euan Kelly, capital markets partner at Knight Frank Edinburgh, commented: “Edinburgh seemed to go against the grain of other cities in the UK with the development of St James Quarter – it is the biggest retail development of recent years and no other city or town in the country has anything like this in the development pipeline. 

But, the city centre lacked a high-quality retail destination as a focal point and, as our research shows, it has adapted well to the Quarter’s arrival.

As a result, Edinburgh’s various retail pitches have re-established themselves or carved out their own distinct identities to co-exist, rather than compete. George Street is a prime example, showing that it can offer a distinct location for luxury brands. In recent years, we have seen more investor interest in the right type of retail property and expect that to continue as 2025 progresses.”

Douglas Binnie, capital markets partner at Knight Frank Glasgow, added: “Glasgow has long been one of the UK’s top retail destinations and continues to retain that status. New brands are arriving in the city – most notably Uniqlo, in the not-too-distant future – and future redevelopment plans in the city centre, along with the council’s plans to double the number of people living in the heart of Glasgow, should only strengthen its offering.

Buchanan Street, in particular, remains one of the top-performing retail destinations in the UK and has bounced back well from the pandemic years, a fact reflected in Glasgow being top for Zone A rent growth between 2013 and 2023. 

There have recently been good levels of letting activity on the thoroughfare and, with that, Zone A rates continue to rise. Adding to several recent deals, we expect to see more investment activity on the street this year.”