'Welcome signs' of office rentals stabilising

Published on Monday 2 August 2010 15:43

PROPERTY agents have welcomed an increase in the number of office rental deals in Edinburgh as a sign that the market has stabilised.

Jones Lang LaSalle said yesterday that rental transactions had increased slightly in the second quarter of 2010 on the previous quarter. Significant deals included lettings to H&M for a new call centre at Waverley Gate and a letting to the charity Chest, Heart & Stroke Scotland to relocate its head office. Asset management firm Baillie Gifford also expanded its offices at Calton Square.

Occupier take-up in the quarter totalled 153,000sq ft, including three transactions over 10,000 sq ft - the same number as recorded in the first quarter. The overall number of inquiries in the second quarter corresponded with the same period last year. While activity mainly remains below 5,000sq ft, there were a greater number of requirements seeking space over 10,000sq ft, the firm said.

JLL also noted that supply appears to have peaked in the fourth quarter of 2009 and over the last two quarters there has been a gradual reduction in availability. There are no other speculative developments due for completion in 2010, which JLL said is likely to add further pressure to the diminishing stock levels.

Associate director Craig Watson said: "These figures demonstrate a degree of stability in the Edinburgh office market although the majority of activity, some 80 per cent, is still focused at the smaller end. General sentiment from occupiers appears to have improved."