The fast-expanding tech, media and telecommunications (TMT) sector continues to be a driving force in Edinburgh’s office market according to the latest industry figures.
Almost a third of all office-take up in the capital during Q1 of 2017 was in the TMT sector.
Figures from commercial property advisory GVA show that 34 deals above 1,000 sq. ft. completed in the first quarter of the year, with 30% involving lets to TMT businesses. The city’s biggest deal saw Cirrus Logic let 22,572 sq. ft. at Quartermile Four.
Total take-up in Scotland’s capital was 194,225 sq. ft. with 116,833 sq. ft. in the city centre and 77,322 sq. ft. out-of-town.
Peter Fraser, Associate Director, Offices, at GVA, said: “It’s no secret that the TMT sector has become more and more active in Edinburgh. The wider office market has performed well considering the ongoing political uncertainty. When you discount that Napier University took 107,000 sq. ft. of space in Q1 2016, there has been a higher-take up in the first quarter of this year despite the Brexit vote happening in between.
“We’ve also seen a higher quantity of deals complete compared with this time last year and the market for sub 2,000 sq. ft. lets in the city centre has been particularly active, whilst about a quarter of the total number deals in Q1 were for Grade A space.”
“However, with robust levels of demand in Edinburgh and diminishing supply with options scarce, occupiers who need to move may be forced to just take what they can.”
Across the Central Belt, the Glasgow market enjoyed a resilient quarter. City-centre take up was 103,322 sq. ft. and the two most significant deals of the quarter both saw occupiers move in to the Abstract building on St. Vincent’s Plaza. Mott McDonald let 34,500 sq. ft. and Wood Group’s leading renewable energy consultants, Sgurr Energy, took 17,249 sq. ft. of space.
Paul Broad, Director of Business Space for GVA, said: “Glasgow’s office market displayed typical resilience in the first three months of the year. The continued lack of supply of Grade A means we expect that there will be a greater focus on Grade B stock throughout the rest of the year. Occupiers will need to consider taking ‘first mover advantage’ and secure preferred options well ahead of lease breaks, or look ahead to secure pre-commitments on options within the new Grade A pipeline.”
GVA also predicted there will be lease event spikes in both Glasgow and Edinburgh occurring in the year ahead, so the fundamentals of supply and demand in both cities remain strong.