Edinburgh office take-up reaches record high

Edinburgh office take-up reached an all-time high in Quarter 2 2017, according to the latest figures from Cushman & Wakefield.

The commercial property and real estate consultant has reported over 535,000 sq ft of office space was transacted during the quarter, the highest recorded figure since the firm began compiling the figures in 2000.

The next highest quarter was Q4 2002 when take-up totalled 462,150 sq ft (including RBS taking 350,000 sq ft at the newly built Gogarburn facility).

Take-up for the first half of the year now stands at 735,000 sq ft which is the highest half year total on Cushman & Wakefield records and, with a good pipeline of lettings anticipated in the latter half of the year, it looks likely annual take-up will exceed one million sq ft for only the second time in market history.

The biggest deal of the quarter saw the Government Property Unit (GPU) agree a pre-let of 181,000 sq ft at New Waverley. Other significant deals included State Street’s pre-let of 65,600 sq ft at Quartermile 3, Computershare acquiring 41,000 sq ft at Edinburgh House on North St Andrew Street and Standard Life Investments taking 31,300 sq ft at John Courage House in South Gyle.

James Thomson, head of Cushman & Wakefield’s Edinburgh agency team, said: “The Edinburgh market has delivered an outstanding performance in the first half of 2017 despite ongoing global and national political uncertainty. Whilst large single lettings like the GPU can skew trends, the State Street, Computershare and Standard Life deals are all sizeable lettings on long leases which illustrate strong occupier confidence in Edinburgh as a place to do business.

“The majority of significant letting activity has focussed on ‘Grade A’ accommodation, with large occupiers leaning towards the best quality space. The result is that supply has fallen further with only 302,000 sq ft Grade A space available in the city centre and 54,000 sq ft in West Edinburgh at the end of Quarter 2. Future supply is constrained with only three new developments under construction in the city centre which will deliver a further 174,000 sq ft to the market, of which 65,000 sq ft is pre-let to State Street. This places a premium on city centre development and asset management opportunities.”

Stewart McMillan, associate at Business Space, added: “Supply levels are tightening significantly across the city, particularly for larger occupiers. This is reflected in the significant recent pre-letting activity and we anticipate that increasingly occupiers will act early when considering relocation. Further upward pressure on rents for the best quality space in the city centre is likely, and this will increase the appeal of the city’s prime business park locations which now look very competitively priced.”