Surge in Edinburgh office up-take revealed by latest figures

Peter Fraser, Director at Avison Young

Office take-up in Edinburgh during the first quarter (Q1) of 2019 has soared by more than 40% across both city centre and out of town markets, according to research by leading commercial real estate services firm, Avison Young.

However, with the availability of Grade A and B office stock in central Edinburgh estimated to be at critical low at around 496,000 sq. ft., strong competition amongst occupiers could be a catalyst to further rent increases.

Against this backdrop, the research also reveals a surprisingly high rise in the number of unrepresented tenants who are not seeking professional advice.

Peter Fraser, Director at Avison Young, said: “While the latest figures show this has been a strong quarter for Edinburgh, limited choice in the market remains a factor. Occupiers should be aware of this, particularly when faced with lease expiries or break options. The decision-making process is taking longer, a factor that may be enhanced by Brexit.

“In Edinburgh, Avison Young is aware of over 100 local businesses who are facing lease expirations over the next 18 months and will need to consider their future property needs. The competitive reality of the market, which will likely see further rental growth across the city and an inevitable shortage of stock, means that occupiers should consider seeking professional property advice to secure the best deal for their business in terms of the most appropriate space and best possible terms.”

The latest Avison Young figures reveal that total Q1 take-up across the Edinburgh region held at 206,000 sq. ft, marking an increase of 38% from the same period in 2018. The results indicate the strength of out of town markets, where activity accounted for 53% of total take-up – up 24% from Q1 2017.

While growth in out of town markets is likely to be sustainable, the findings show that some 450,000 sq. ft of leases are expected to expire in the city centre over the next 18 months.

Meanwhile, figures for Q1 for Glasgow show that activity was below average, as city centre take-up for Q1 totalled 103,497 sq. ft.

Alison Taylor, Managing Director and Principal for Avison Young, said: “Glasgow experienced an incredibly active 2018, with 1.4 million sq. ft city centre take-up across the year. Given this, Q1 was likely to be low by comparison and there is still huge uncertainty in the business community surrounding Brexit. However, our prediction for the remainder of 2019 is that take-up will be boosted by a number of significant large pre-lettings enquiries considering a number of new build Grade A developments proposed in the city centre.”

Avison Young advised on a number of deals in Glasgow city centre, including the quarter’s largest letting of 15,744 sq. ft at 2 West Regent St to Gamma Telecom Ltd where Avison Young acted jointly with Lambert Smith Hampton and Martin Edgar.

This follows Avison Young Glasgow’s recent successes at the industry recognised CoStar Awards, where they won the most active agent by disposals (sq. ft) during 2018.