Capital office take-up leaps over 1 million sq ft in 2015

Edinburgh's Quartermile development has enjoyed strong take-up
Edinburgh's Quartermile development has enjoyed strong take-up
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More than one million square feet of office space is expected to have been taken up by businesses in Edinburgh before the year is out, according to property experts.

The figure would mark a 7 per cent increase on 2014’s total and includes some 150,000sq ft currently under offer that is expected to complete before the end of this month.

Property consultancy Savills, which examined the state of the capital’s office market, said technology occupiers had become increasingly active. It added that activity has been largely driven by a lack of new stock coming onto the market “willing occupiers to act now where they would have otherwise waited”.

Fantasy sports game operator FanDual has pre-let some 59,000sq ft at the Quartermile development where chip developer Cirrus Logic is expected to conclude on 70,000sq ft by the end of the month. The Quartermile 4 building is currently under construction and due to complete in the second quarter of 2016.

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With banking giants JP Morgan and HSBC both expanding at Edinburgh Park this year, Savills said the market had also witnessed an “overall uptick in activity” across west Edinburgh, including the South Gyle Business Park.

Occupier confidence and diminishing city centre stock are motivators for this, it noted, alongside rents sitting at a 40 per cent discount to those of similar Grade A quality in the city centre. Rents in central areas have firmed throughout the year, with Grade A costs now sitting at some £32.50 per sq ft.

Kate Graham, director in the national offices team at Savills Edinburgh, said: “This has been a noticeably strong year for Edinburgh’s office take-up and the level of activity at west Edinburgh, in comparison to recent years, demonstrates the health and depth of the market.

“Looking ahead we anticipate rents to continue rising in 2016 where they could reach £34 per sq ft for the best quality stock and a continued reduction in rental incentives.”

Earlier this year, property adviser JLL predicted that Edinburgh’s office market would end the year on a high after a string of key lettings kept things on the boil in the second quarter.

Noting that “occupier confidence has returned to the Edinburgh office market”, it forecast steady activity in the second half, with year-end take-up set to be well above the five and ten-year averages.