Ben Reed: Office market must keep options open

The flagship Scottish Hub will be housed in the last phase of the successful mixed-use development at New Waverley

The 20-year lease is the largest occupier deal of its kind in Edinburgh for well over 20 years. The new hub is set to be the final phase of the vibrant and successful mixed-use development at New Waverley which was selected after a rigorous process which looked at a broad range of criteria as well as cost efficiency. The big draw of the site, which has transformed the heart of the city’s Old Town, is its strategic location adjacent to Edinburgh’s main railway station, providing excellent connectivity for staff and visitors.

The development will undoubtedly deliver significant benefits to Edinburgh and marks an exciting time for the city’s office market which in the first half of 2017 recorded the highest rates of occupier activity in the past ten years.

Indeed, Edinburgh’s appeal is perhaps stronger than it ever has been, with people from around the world keen to visit, live and work here. The city has witnessed the emergence of a vibrant entrepreneurial ecosystem with support from public agencies complemented by incubator spaces such as Entrepreneurial Spark, Creative Exchange and Edinburgh’s dedicated tech accelerator, CodeBase.

The city’s thriving start-up community is led by the successes of more established technology pioneers such as Skyscanner and FanDuel both of which have achieved the elusive ‘unicorn’ status of a US$1 billion valuation. As well as our home grown tech success stories, Edinburgh is also attracting global interest, with both Cirrus Logic, Amazon and more recently, Australian financial services company Computershare, choosing to base and expand their operations in the capital.

Indeed, Computershare’s expansion at the new 40,000 sq ft technology centre within the building known as 4 North on North St Andrew Street, due to open next year, is a great example of the value to Edinburgh of new office stock which is fit for the requirements of today’s employers. Unfortunately for Edinburgh, however, the availability of a new offices capable of housing such a requirement is an exception to the rule.

It’s been said many times, but the city must invest in new development as a priority if it is to continue accommodating ambitious home-grown talent or large multinational occupiers. Without an increase in available refurbished or new grade A office space offering larger floor plates in modern specified buildings there is real risk that footloose companies will turn to other UK cities.

While the first half of this year will go down as a record-breaking one thanks to a handful of significant deals, there continues to be a chronic lack of supply in both grade A and refurbished stock coming to the market over the next 18 months. In order to keep attracting occupiers to Edinburgh, development and commitment is needed. Without it, activity at the top end of the market is at risk of slowing down due to a lack of viable options.

Ben Reed is JLL regional director of Office Agency in Edinburgh