Pressure on space

Conversion of offices into hotels ‘unsustainable’ warns agency

Osborne-House-west-coates

Osborne House: the latest office conversion

A property agency has warned that the conversion of offices into hotels in Edinburgh is ‘unsustainable’ and could have a damaging effect on the city’s growth prospects.

Knight Frank’s concerns have emerged as permission has been granted to turn a 1970s block in the city’s west end into a 157-bed hotel with restaurant and bar.

York-based S Harrison acquired the four storey Morris and Steedman-designed Osborne House in West Coates last year. It is also converting former offices in St Andrew Square into a hotel for Malmaison Hotel du Vin Group.

Knight Frank’s Edinburgh 2019 report said that 720,000 sq ft of Grade B office space had been converted through planning for change of use while the lack of development land “has hindered the delivery of new office space.”

Just 338,000 sq ft of Grade A space is set to be delivered by the end of 2021, with 35% of that figure already let to occupiers. Grade A take-up has averaged more than 220,000 sq ft in the city centre over the past few years, underlining the strength and depth of demand from Edinburgh’s businesses. 

Knight Frank said that, while hotels and residential units are undoubtedly important for the city, a balance needed to be struck to stop the ‘unsustainable’ rate of conversion from offices.

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