Demand for Edinburgh office space at five-year high

By DOMINIC JEFF
Published on 16/07/2012 00:00

DEMAND for office space in Edinburgh accelerated in the last quarter, adding to concerns that the capital will soon run out of suitable business accommodation.

Research by property firm Jones Lang LaSalle shows the city’s office space is being snapped up at the fastest rate since 2007, with more than 244,000 square feet taken up by firms during the three months to the end of June, in 41 separate deals.

That marks an increase of 20 per cent on the first quarter total of about 204,000sq ft. Jones Lang LaSalle said the figures were a significant improvement on the same period last year when take-up stood at 150,000sq ft.

It said the strong performance has been bolstered by a number of large-scale city centre lettings, including Blackrock’s move into 80,000 sq ft offices at Exchange Place and the arrival of Skyscanner and Investec at Quartermile One.

A report last week from GVA, another property agency, suggested that Edinburgh will run out of Grade A office space within 18 months because there are too few building and restoration projects in the pipeline to keep up with demand.

Jones Lang LaSalle warned that while the rise in activity will be seen as a sign of growing confidence in the market, it also added to pressure on supply.

It has calculated that there is about 400,000sq ft of high-grade office space currently available in Edinburgh, of which 25 per cent is already under offer or has strong interest. It said the level of vacancies was now less than 1 per cent of the total supply.

Director of office agency Ben Reed said: “We’ve been talking for some time about the squeeze on Grade A supply in Edinburgh, but any doubts that existed about the legitimacy of this argument should surely now be quashed.