July 16, 2014
Office occupier take up in Edinburgh continues to show strong demand, with total occupier take up over 470,000 sq ft, significantly ahead of the same period last year (301,000 sq ft) according to new research by JLL. Over 225,000 sq ft was transacted in Q2 (April – June), slightly less than the Q1’s figure of 245,000 sq ft. However JLL anticipates a slow down over the summer period in the run up to the Scottish referendum, a result of the holiday period and companies delaying decisions until the outcome is clear. Despite this, JLL predicts that year end take up will remain above the five and 10 year average. Activity was characterised by a greater number of smaller deals, with only 4 transactions over 10,000 sq ft. Enquiries continue to focus on offices which are well connected into the public transport network and offer good facilities for staff.
Over 80 per cent of take up occurred in the city centre, with a number of significant lettings including the Scotsman (25,555 sq ft) at Orchard Brae House, Aberdeen Asset Management (14,815 sq ft) at 40 Princes Street and Codebase (10,000 sq ft ) at Argyle House.
Geoff Scott, Associate Director Office Agency, JLL in Edinburgh commented: “Take-up over the last three months has proven resilient with a large number of transactions. However, these transactions have generally been smaller and we’ve certainly not seen the same number of larger lettings which occurred last year.
“The dynamics of the market are right for pre-letting activity, with only three buildings currently able to accommodate a requirement over 30,000 sq ft in the city centre, but we’ve yet to see such activity occur. Given uncertainty over the outcome of the referendum and the effect this is having on occupier decision-making, it is likely that we will now not see major pre-letting activity until 2015.
“Larger corporate occupiers with forthcoming lease events should be alert to the growing shortage of accommodation as there are currently no new schemes under construction. Enabling works have however started at Interserve/Tiger’s development ‘‘The Haymarket’ and demolition is underway at Standard Life/Peveril Securities’ ‘3-8 St Andrew Square’.”