Edinburgh sees significant rise in top grade office take up
There has been a significant rise in take up of top grade offices in Edinburgh with the second quarter of 2019 seeing growth, the latest commercial property report shows.
Take up reached 176,549 square feet in the second quarter, just 9,210 square feet short of the previous quarter’s figure, according to the research from real estate consultancy CBRE.
Meanwhile, annual take up at the end of the second quarter of 2019 was up around 2% on the previous 12 months at 840,640 square feet, suggesting occupier sentiment remains positive.
However, regears saw a significant increase from 19,335 square feet in the first quarter to 166,035 square feet in the second quarter, with engineering giant Aecom renewing its lease on around 17,000 square feet at the city’s prominent Tanfield development for another 10 years.
Grade A take up throughout the city has also risen significantly from the last quarter to 92,211 square feet, an increase of 56%. This was mainly due to the 35,608 square feet taken at South Gyle Business Park’s Broadstone building by Instant Offices and the letting of all seven floors at 80 George Street, around 44,000 square feet, to flexible office provider WeWork.
Law firm Womble Bond Dickinson finalised its lease on 7,357 square feet at Semple Street at the end of June, further reducing available Grade A space in the city centre.
At 362,308 square feet, the first half of 2019 take-up was down 26% from the same period in 2018, however the 2018 figure at 491,885 square feet was skewed by the short term charity letting of 105,000 square feet at 105 Ferry Road. When removed, take-up figures year on year are almost identical.
‘With supply levels in Edinburgh continuing to tighten and only two Grade A schemes under construction, we are likely to see continued upward pressure on rents,’ said Beverley Mortimer, senior surveyor in CBRE’s Advisory and Transaction Services team.
‘The notable rise in regears for the quarter indicates that occupiers are seeing a real lack of alternative options when it comes to quality office accommodation in Edinburgh’s most desirable locations, and we anticipate this trend continuing throughout 2019,’ she pointed out.
‘Unless the speculative office development pipeline improves, the city risks losing potential footloose new occupiers to other cities which can offer a greater choice of accommodation,’ she added.