NEW research has revealed that a lack of available Grade A office accommodation in Edinburgh is driving an uplift in rents for quality space across the market.
Property consultancy Cushman & Wakefield said the market delivered ‘solid’ take-up in Q1 this year, totalling 209,000 sq ft. The letting of 103,000 sq ft at 1 Lochside View in West Edinburgh to Edinburgh Palette accounted for nearly half of all take-up. Key office deals included the pre-letting of 14,680 sq ft on the fifth and sixth floors at 30 Semple Street by Hymans Robertson and GE Vernova acquiring 9,464 sq ft at 1 New Park Square, Edinburgh Park.
Supply continues to be a ‘real challenge’, with 24 St Andrew Square and 30 Semple Street the only prime Grade A office schemes currently onsite. Cushman & Wakefield added that the lack of quality stock coupled with strong tenant demand has seen prime headline rents in the city centre increase to £45.00 per sq ft – 12.5% year on year growth – with prime rents in the non-city centre market increasing to £30.00 per sq ft (20% year on year growth).
The current office development landscape and underlying alternative use value for buildings in Edinburgh is said to have led to potential development stock being removed from the pipeline, exacerbating the ‘constrained’ supply position.
Adam Watt, associate director at Cushman & Wakefield, said, “We continue to see a competitive landscape in the Edinburgh office market as occupiers vie for the best available space for their talent. The office remains central to many businesses as a hub for collaboration and interaction and with limited prime Grade A options available and a constrained development pipeline, occupiers are having to enter the market well in advance of their lease expiry date. Pre-lets will be required to deliver the development stock not currently onsite, so early engagement from occupiers with landlords is critical in unlocking these opportunities.”
