OFFICE uptake in Edinburgh during the first quarter of the year soared by more than 40%, according to research by a commercial real estate services firm.
The figures released by Avison Young found that the uptake was strong both within the city centre and across the out-of-town markets.
However, with the availability of Grade A and B office stock in central Edinburgh estimated to be at critical low – believed to be around 496,000 sq ft – strong competition amongst occupiers could be a catalyst to further rent increases.
Against this backdrop, the research also reveals a surprisingly high rise in the number of unrepresented tenants who are not seeking professional advice.
Peter Fraser, director at Avison Young, said: “While the latest figures show this has been a strong quarter for Edinburgh, limited choice in the market remains a factor.
“Occupiers should be aware of this, particularly when faced with lease expiries or break options. The decision-making process is taking longer, a factor that may be enhanced by Brexit.”
The latest Avison Young figures also reveal that total Q1 take-up across the Edinburgh region held at 206,000 sq ft, marking an increase of 38% from the same period in 2018.
The results indicate the strength of out-of-town markets, where activity accounted for 53% of total take-up – up 24% from Q1 2017.
While growth in out-of-town markets is likely to be sustainable, the findings show that some 450,000 sq ft of leases are expected to expire in the city centre in the near future.
Fraser said business owners in such a position should consider their options carefully.
“In Edinburgh, Avison Young is aware of over 100 local businesses who are facing lease expirations over the next 18 months and will need to consider their future property needs,” he said.
“The competitive reality of the market, which will likely see further rental growth across the city and an inevitable shortage of stock, means that occupiers should consider seeking professional property advice to secure the best deal for their business in terms of the most appropriate space and best possible terms.”
Meanwhile, figures for the first quarter for Glasgow show that activity was below average, with city centre take-up for Q1 totalling 103,497 sq ft.
Alison Taylor, the managing director and principal for Avison Young, said: “Glasgow experienced an incredibly active 2018, with 1.4 million sq ft city centre take-up across the year.
“Given this, Q1 was likely to be low by comparison and there is still huge uncertainty in the business community surrounding Brexit.
“However, our prediction for the remainder of 2019 is that take-up will be boosted by a number of significant large pre-lettings enquiries considering a number of new-build Grade A developments proposed in the city centre.”
Avison Young advised on a number of deals in Glasgow city centre, including the quarter’s largest letting of 15,744 sq ft at 2 West Regent Street to Gamma Telecom Ltd, where Avison Young acted jointly with Lambert Smith Hampton and Martin Edgar.
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