Nearly 580,000 square feet of city-centre office space was let last year, up by 150 per cent from 2020, independent commercial property consultancy Knight Frank has calculated – adding that the final quarter of 2021 saw 268,640 sq ft of take-up compared to 99,321 in the same period in 2020.
The average deal size in the Scottish capital increased to more than 5,000 sq ft as occupiers sought more space, with new-build, grade-A space continuing to dwindle, said Knight Frank, which flagged a series of pre-lets agreed at Haymarket Edinburgh including to Cairn Energy and law firm Shepherd and Wedderburn, which were announced in December.
Professional services and technology, media, and telecommunications were the most active sectors, the new study found, accounting for 12 per cent and 31 per cent of take-up last year respectively – and Edinburgh-founded sports betting tech giant FanDuel agreeing to take nearly 60,000 sq ft at 2 Freer Street in Fountainbridge was the biggest deal of the year.
Simon Capaldi, office agency partner at Knight Frank Edinburgh, said: “Last year saw a strong final quarter, with a flurry of deals concluded. Despite the challenges of the pandemic, Edinburgh’s office market has been resilient throughout.
“We’re also beginning to see the long-discussed flight to quality, with more occupiers moving to high-quality and more [environmental, social, and governance]-friendly space, such as 1 Haymarket Square. We expect this trend to continue into 2022 as more occupiers look for their property to reflect their sustainability commitments, business values, and the increased focus on staff welfare.
“There is a highly positive sentiment going into this year, with Edinburgh being an even more desirable place to live and work. Our research has shown that it is among the best cities in Europe for quality of life and wellbeing – and that only looks like remaining the case.”
Knight Frank said earlier this week that industrial and retail-warehousing sites were leading investment in Scottish commercial property, but said it expected investment in offices to pick up this year as more people begin to return to workplaces and travel restrictions ease.