Take-up rises by 40%
Rent rises likely as Edinburgh office market tightens
Software specialist PODFather’s relocation to a new Gyle HQ was among first quarter deals
Surging demand for offices in Edinburgh during the first quarter of 2019 outstripped supply and is likely to push up rents, according to commercial real estate services firm, Avison Young.
Office take-up across both city centre and out of town markets has risen by 40% in the three month period, but the availability of Grade A and B office stock in the city centre is estimated to be critically low at around 496,000 sq ft.
The figures reveal that 206,000 sq ft was taken up across Edinburgh in the first quarter, marking an increase of 38% from the same period in 2018. The results indicate the particular 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.
Figures for Q1 for Glasgow show that activity was below average, totalling 91,663 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.”
Figures for Q1 for Glasgow show that activity was below average, as city centre take-up totalled 103,497 sq ft.
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 on which the firm acted jointly with Lambert Smith Hampton and Martin Edgar.
> Allied Surveyors Scotland’s east coast office has completed more than 30 transactions in its first year, including a 660 sq ft office suite at Timber Bush in Leith, and a second retail acquisition on behalf of the Edinburgh-based charity St Columba’s Hospice.