Demand for Edinburgh office space soars

Demand for Edinburgh office space soars

Office occupier take up in Edinburgh hit a 15-year-high during 2015, according to new research by leading property consultancy JLL.

Around 950,000 sq ft was transacted during the full year in 2015, up 8.6% from the previous year’s total of 875,000 sq ft.

The total take-up for 2015 is at its highest level since 2001 and significantly above the five year average of 650,000 sq ft.

While the capital’s resurgent financial services sector continued to drive much of the transaction activity, Edinburgh’s fast growing TMT (technology, media and telecommunications) industry played an increasingly significant role.

West Edinburgh was also a beneficiary of this stellar year with take up levels amounting to over 15% of the capital’s total (37% of Q4), much of which was driven by expansion from existing occupiers.

The ‘hotspots’ in the market were in the sub 5,000 sq ft and above 30,000 sq ft size categories including a 59,000 sq ft pre-let by Fanduel at Quartermile 4.

Ben Reed, regional director at JLL, said: “After a record breaking year of activity in 2015, Edinburgh’s office market continued to surpass expectations with take-up achieving levels not seen for 15 years.

“Although this was clearly helped by an exceptionally strong Q4, the broader trend is of a vibrant and highly competitive office market, especially at the lower and upper ends of the size categories.

“The issue for Edinburgh remains the same as it has been for the past four years, a critical lack of supply to meet increased demand.

“This is no longer restricted to the city centre and we will have to wait nearly two years for the next wave of developments.

“This is driving some occupiers to review their options well in advance of any current lease event, particular those looking for Grade A accommodation over 30,000 sq ft which is now scarce across the city.”

The vacancy rate of new Grade A is currently under 1% and will only be bolstered once the next wave of developments is completed towards the end of 2017.