Green bank holds hope as office lettings decline

OFFICE lettings in Edinburgh were down 8 per cent to 102 deals in 2011, despite it being one of the capital’s best years for inward investment, new research has shown.

Most of the deals – 55 per cent – were for offices of less than 5,000sq ft, according to estate agency DTZ.

Deals on offices of between 5,000 and 10,000sq ft were hit the most by the slowdown in activity. Transactions for properties in this category made up just 3 per cent of office rentals, rather than 15 per cent which is more typical for the city, DTZ noted.

Inward investors taking up new office space in Edinburgh included online retail giant Amazon and financial software firms Avaloq and FNZ.

DTZ added that the Green Investment Bank (GIB), which will be located in Edinburgh in the coming months, would be a “catalyst for a swathe of inward investors related to the renewable energy sector”.

Office agents at Savills have predicted that the GIB will probably require premises up to 5,000sq ft.

DTZ said that a shortage of “Grade A” office space would eventually cause a spike in rental prices but this was not likely to happen until 2013-14.

Mark Jones, offices director for DTZ Edinburgh, said: “During 2011, the city in its entirety saw total take-up at just under 433,000sq ft, achieved in 102 deals.

“In comparison to 2010, take-up was down a third in terms of volume, although the number of deals was broadly consistent.”