ACCORDING to Savills, take-up of office space in Edinburgh hit 334,510 sq ft at the end of Q3 2023, a 25% increase on last year’s figure. Whilst the city saw a 7% decline on the five-year average, Edinburgh suffered the lowest fall in take-up of the UK’s big six cities (Birmingham, Bristol, Glasgow, Leeds and Manchester) as it continues to see strong levels of demand despite ongoing economic uncertainty.
Key deals so far include the letting of circa 30,000 sq ft to Analog Devices at 2 Freer Street, the assignation of Smartsheet’s 15,000 sq ft lease at Quartermile 3 and the letting of 14,000 sq ft to Cubo at 40 Princes Street.
In terms of occupier take-up, the professional and insurance and financial services sectors remain the most active, with technology, media and telecom (TMT) firms also keen to secure space. Savills notes that this remains largely consistent with the pre-pandemic market, with insurance and finance seeing the largest jump accounting for 17% before 2020, compared with 32% post-Covid. However, this can largely be attributed to Blackrock taking 130,000 sq ft at 20 Brandon Street in 2022.
Looking ahead, there are a significant number of requirements across these sectors, which continue to see a stronger return to the office when compared to other areas of business. At present, there is over 700,000 sq ft of demand from occupiers looking for Prime / Grade A quality space.
Mike Irvine, director in the office agency team at Savills Edinburgh, comments: “Edinburgh’s office market continues to perform comparatively well when it comes to other UK cities, bolstered by strong levels of demand despite the ongoing headwinds currently facing the market. There remains an acute lack of supply and this will only partially be addressed by the existing development pipeline. This will likely lead to significant rental growth on prime stock, which may in turn lead to more development coming through in the medium to long term.”