Supply shortage boosts office space occupancy levels

Tight supply rather than strong demand has seen office occupancy levels in Edinburgh rise to pre-recession levels, a new report has found.

The Edinburgh city centre office market reached its highest level of occupancy since 2007 despite an annual decline of 18 per cent in take-up across the city’s central business district.

Within the centre, occupancy rates topped 89.2 per cent, according to a report by real estate company Colliers International. Prime rents in the city stand at £27 per square foot, having seen a fall of 2 per cent during 2011.

Patrick Hannay, head of offices with Colliers International in the city, said: “It is unlikely we will see a significant uplift in Edinburgh city core rents during the course of 2012”.

The report found that the overall amount of space let across the city remained subdued, with a slight pick up expected in 2012, as tenants look to take advantage of market conditions.

Glasgow saw a slight drop in demand for offices in 2011, with a strong element of “market churn” leading to a decline in occupation in the city centre.