Edinburgh’s office take-up for 2017 has already exceeded the annual average by 15% after strong activity in the first nine months of the year.
The latest Big Nine report from GVA reveals that city centre take-up in the capital totalled 171,820 sq. ft. for Q3 2017, whilst out-of-town take-up was 36,192 sq. ft. Total take-up in Edinburgh for 2017 amounts to 945,859 sq. ft.
Aberdeen Standard’s 69,000 sq. ft. pre-let at 10 George Street and Royal London’s 32,000 sq. ft. deal at 22 Haymarket Yards spearheaded a busy quarter for the financial sector in Edinburgh.
The city’s largest vacant office building also came to market following State Street’s relocation to Quartermile 3, with 110,000 sq. ft. available at 525 Ferry Road.
Peter Fraser of GVA said: “The second quarter of the year was record-breaking for Edinburgh in terms of take-up thanks to the Government Property Unit deal and Q3 has performed strongly too. Looking forward, there are a number of well progressed large enquiries from professional and financial services firms and the city’s reputation as a tech hub is well justified given how busy that sector remains at the smaller end of Edinburgh’s market.
“Edinburgh isn’t unique among UK cities in facing a tight supply of Grade A city centre stock. With only three buildings able to accommodate floorspaces over 15,000 sq. ft., more landlords are refurbishing offices rather than converting to alternative use.”
It was a muted third quarter in Glasgow, with city centre take-up of 63,608 sq. ft. and out-of-town take-up amounting to 47,187 sq. ft. Glasgow’s take-up for the year now amounts to 298,992 sq. ft. and the city is expected to finish 2017 robustly.
Paul Broad of GVA said: “Q3 saw a number of sub-10,000 sq. ft. deals conclude in Glasgow, with the city’s professional services and flourishing creative industries continuing to expand. A number of larger occupier transactions slipped in to Q4 and we expect these to conclude before the end of the year to bring the total take-up for 2017 in line with the average.
“Much like Edinburgh, Grade A space is at a critically low level. All eyes are on the speculative development pipeline and we are seeing some landlords push on with refurbishments to take advantage of the current imbalance between supply and demand. We anticipate a rise in headline rents and reduction in occupier incentives through 2018.”
After three quarters of the year take-up across the UK is on course to rival the levels witnessed at the peak of the market in 2015, over 9 million sq. ft. The conclusion of GPU deals in Cardiff, Leeds, Liverpool and Birmingham this quarter, as well as in Edinburgh in Q2, have driven this figure up.