The latest research from leading commercial property consultancy CBRE shows that the Edinburgh office market has experienced a surprisingly positive start to the year, with 202,500 sq ft of take-up for Q1 2019.
This is 49% higher than the 135,842 sq ft transacted for the same period in 2018, largely due to the sale of Westfield House to the Church of Scientology at 48,614 sq ft. In addition, regears and lease renewals totalled 19,335 sq ft.
Grade A take-up within Edinburgh City Centre accounted for 59,081 sq ft, or 27%, of the Q1 total, and was driven by the leasing of 31,000 sq ft within the recently refurbished Exchange Crescent to a tech occupier. This figure is up from the same quarter last year where only 18,409 sq ft of Grade A space was transacted.
Beverley Mortimer, senior surveyor in CBRE’s Advisory & Transaction Services team, said: “The general sentiment is that political uncertainty is introducing a slight hesitancy to the occupier market, however very few – if any occupiers – have attributed Brexit as the main reason for not progressing with a planned or potential move. On a positive note, in the last few weeks there has been an increase in occupier demand and several larger requirements of 10,000 sq ft plus have entered the market.”
Ms Mortimer continued: “A trend that has been on the increase is landlords undertaking refurbishment of second hand Grade A accommodation with an objective of both retaining existing occupiers and attracting new tenants to space that may have been slow to let.
“Kennedy Wilson has recently replaced the external cladding and completed a full refurbishment of all vacant suites and common areas at the prominent Exchange Tower development, while Saltire Court has also benefitted from significant investment in its large common areas, bringing a much more contemporary look to the reception and atria space. Exchange Crescent has similarly witnessed a full refurbishment of common parts and vacant suites that has resulted in the letting of space that had remained empty for some time. This is indicative of the ever increasing importance of accommodation when attracting and retaining staff.”
The report notes that new-build Grade A office supply in Edinburgh remains critical. There is currently around 55,000 sq ft remaining at Capital Square ahead of its scheduled completion in May 2020, 2 Semple Street has just 35,000 sq ft available, and only around 30,000 sq ft of sub-let space is on offer at 20 West Register Street.
