A new report has claimed that Edinburgh’s popularity with tourists could hinder the availability of office space for businesses in the city.
Knight Frank’s Edinburgh 2019 report said that 720,000 square feet of Grade B office space had been converted through planning for change of use.
The population rose 12.5% in the ten years to 2017 and visitor numbers reached 4.26 million, according to figures from the City of Edinburgh Council. However, a lack of development land is said to have hindered the delivery of new offices, with just 338,000 square feet of Grade A space set to be delivered by the end of 2021.
35% of that figure has already been let to, with Grade office take-up averaging more than 220,000 square feet in the city centre over recent years.
Knight Frank said that, while hotels and residential units are important, a balance needs to be struck to stop the ‘unsustainable’ rate of conversion from offices.
Alasdair Steele, head of Scotland commercial at Knight Frank explained, “Tourism has proved a double-edged sword for Edinburgh. Visitors coming to the city and spending money is great news for hotels and retailers, but it’s had unintended consequences for other sectors. The supply of office space is reaching perilous lows and rents continue to rise for space in Edinburgh’s core. At the same time, the city’s population is growing at a robust rate and, combined, these pressures are taking space from the business community at an unsustainable rate.
“In time, this could prove to be a chokehold on the city’s growing companies – particularly those which would normally come out of serviced accommodation or incubators. Typically, they would look to take Grade B space, but with just 220,000 sq. ft. available in the city centre – only a third of what’s available in Glasgow – there is little to choose from.
“Local authorities in other parts of the country – such as Newcastle City Council – have found ways of encouraging development, with the public sector de-risking the process. Edinburgh’s planners could be more rigid by ensuring suitable city centre sites go to offices; however, it’s incumbent on everyone involved in Edinburgh’s property industry to come together and think of creative ways we can use the available land to its full potential.”