Edinburgh’s commercial property market secured a busy quarter of office occupier take-up, despite levels of supply becoming critically low, according to data from JLL.
Total take-up in Edinburgh reached 350,000 sq ft between April and June more than double the figure for Q1. This was spread across 45 deals, the largest being a flexible agreement with art charity Edinburgh Palette who took 110,000 sq ft at 525 Ferry Road to form a creative hub for artists.
The quarter’s stand out occupational deal saw Baillie Gifford pre-let 60,000 sq ft at The Mint Building on St Andrews Square, further strengthening the area as a prime destination for occupiers.
Meanwhile in west Edinburgh, Diageo pre-let 43,801 sq ft at 11-12 Lochside Place in Edinburgh Park. JLL were involved in the three largest deals of the quarter.
The latest quarter was significantly busier than the first three months of 2018, when 140,000 sq ft changed hands, taking Edinburgh’s half year total to nearly half a million sq ft. By comparison, in the first half of 2017, a decade high of 770,000 sq ft changed hands.
Despite consistently strong levels of occupier activity in recent quarters, the issue say JLL, is a critically low pipeline of new office space coming through.
Geoff Scott, Associate Director at JLL said “The market for Grade A space is becoming critically short with strong pre-letting activity with a number of occupiers circling on the few remaining options available in the city centre. There is only one new development due for completion in 2018 at 2 Semple Street and only one major refurbishment, 80 George Street, which will be ready in December. The sale of The Haymarket to M&G will however likely help redress the balance going forward as part of the next wave of major new development in Edinburgh.
“With a strong stream of demand from multiple sectors including financial, professional services technology and co-working operators, we anticipate seeing further rental growth and tightening of incentives in the second half of the year for the best offices, particularly in the city centre.”