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Edinburgh

Uncertainty surrounding  outcome of Scottish Referendum affects Edinburgh Q3 office take-up

Enquiries should now start to increase say JLL


Craig_Watson.jpgEdinburgh, 8 October 2014 – Office occupier take-up in Edinburgh slowed in the third quarter of the year, according to new research from leading property consultancy JLL.

Approximately 131,000 sq. ft. of office space was transacted between July and September – significantly less than the same period in 2013 when 339,000 sq ft. was transacted, and less than the 225,000 sq ft of office space transacted between April and June.

Craig Watson, Director, Office Agency at JLL in Edinburgh, commented: “Uncertainty surrounding the outcome of the Scottish Independence Referendum undoubtedly had a detrimental impact on office take-up during the summer and reduced the number of enquires by 30%. Occupiers opted to wait for political certainty before making business decisions. The lack of larger transactions made this particularly evident.

“As we move towards the end of the year enquiries should now start to increase, leading deals to conclude early in 2015. Edinburgh currently has a low vacancy rate compared to other regional cities, with three new office developments under construction due to complete in 2016. We anticipate that such supply constraints in the market will lead to increased activity and pre-letting activity in 2015.

For the year to date, total occupier take-up in the Edinburgh office market stands at approximately 600,000 sq. ft. – only marginally behind take-up for the same period last year. A large proportion of this year’s transaction volume is attributable to a strong first six months. It is anticipated that the year-end figures will reflect long term average levels.

JLL recorded 45 deals during the third quarter of 2014, compared to a total of 59 deals in the preceding three months. Activity was characterised by a greater number of smaller deals, with only one transaction for floor space of over 10,000 sq. ft. for Standard Life at 6-8 George Street. Other large occupier deals included FanDuel at Quartermile (9,995 sq. ft.) and Storm ID at 41-43 Constitution Street (9,578 sq. ft.). Over 83 per cent of take-up was for deals of less than 5,000 sq ft.

The number of enquiries logged during the third quarter of the year also fell considerably with only 33 new enquiries recorded compared to 48 in the previous quarter.

Craig Watson, Director, Office Agency at JLL in Edinburgh, added: “Edinburgh has traditionally been reliant upon the financial services industry, but the last 12 months has brought with it a wider range of industry sectors with particularly strong growth in the telecommunications, media and technology sector. Such a change is surely of benefit to the city, helping to reduce its dependence on the financial industry for growth.”