New research has revealed movement in Edinburgh accounted for just under a quarter of all office investment activity in the UK regions from April-June this year.
The latest Big Nine report from GVA shows that, from a total of £500m invested across regional cities, Edinburgh attracted £124m, the highest volume outside of London.
Activity in the city was bolstered by the two largest deals of the quarter outside London, which saw MAS Real Estate purchase New Uberior House for £71m and Chris Stewart Group sell The Mint Building to Hines for £53m. Pricing on The Mint reached £800 per sq. ft., a record for the city and reflective of the scarcity of quality stock in the market.
The lack of development and supply is pressuring yields. Prime city centre yields in Edinburgh have sharpened to 4.75% from 5% in the previous quarter, though this is still in line with peak levels in 2007. Investment volumes in the capital are more than double the ten-year quarterly average of £59m.
Stuart Agnew, Senior Director in Investment for GVA, said: “Sentiment in Edinburgh has been strong for some time and the latest figures only underline the confidence in the market. Both domestic and international investors are interested in good quality stock with excellent liquidity and rental growth prospects and Edinburgh is well positioned to meet those needs.”
Significant deals are in the pipeline for Edinburgh in the next quarter, with 40 Torphichen Street and Blenheim House both under offer totalling c. £50M in value. With an anticipated strong final quarter, it is likely that total Investment volumes could reach in excess of £350M.