Office take-up heads past 1m sq ft
Technology growth spurs office take-up in Edinburgh
Growing technology companies will be a key driver in pushing the take-up of office space in Edinburgh beyond more than 1 million sq ft this year.
This marks a 7% increase on 2014 and includes 150,000 sq ft currently under offer and expected to complete before the end of this month.
Activity has been largely driven by a lack of new stock coming onto the market, prompting occupiers to act now where they would have otherwise waited, says property agent Savills.
Technology based firms are behind much of the demand. Fantasy sports game operator FanDuel has pre-let 59,000 sq ft at Quartermile 4 (pictured) where Cirrus Logic is also expected to take 70,000 sq ft by the end of the month. Quartermile 4 is currently under construction and due to complete in the second quarter of next year.
With JP Morgan and HSBC both expanding on Edinburgh Park in 2015, the market has witnessed an overall uptick in activity across West Edinburgh, including South Gyle Business Park.
This is because of occupier confidence and diminishing city centre stock, alongside rents sitting at a 40% discount to those of similar Grade A quality in the city centre, says Savills. Grade A rents are now sitting at £32.50 per sq ft.
Kate Graham, director in the National Offices team at Savills Edinburgh, said: “This has been a noticeably strong year for Edinburgh’s office take-up and the level of activity at West Edinburgh, in comparison to recent years, demonstrates the health and depth of the market.
“Looking ahead we anticipate rents to continue rising in 2016 where they could reach £34 per sq ft for the best quality stock and a continued reduction in rental incentives.”
Deals expected to complete before 31 December include Cirrus Logic‘s pre let at Quartermile 4, Amazon re-gearing at Waverley Gate and extending to 70,000 sq ft and HSBC on 30,000 sq ft at Edinburgh Park.
A report earlier this year said demand for space was now greater among technology companies than those in the financial services sector.