Capital’s office market breaks 10-year average with 3 months to spare
Edinburgh's commercial property market maintained its strong performance for office occupier take-up, transacting over 300,000 sq ft of office space during Q3, according to data from JLL.
According to JLL, a strong third quarter ensures that Edinburgh has already broken the annual 10 year average, following a record-breaking 2017 in which 1,100,000 sq ft was transacted.
Total take-up in Edinburgh reached 301,713 sq ft between July and October, an increase of approximately 30% year-on-year, spread across 49 deals.
Underlining the strength of Edinburgh's professional and financial services sector, Q3's largest occupier deals saw Royal London secure 47,000 sq ft at 22 Haymarket Yards, while Brodies pre-let 43,000 sq ft and Pinsent Masons pre-let 27,000 sq ft at Capital Square.
JLL was involved in nearly half of the total office space transacted during the quarter.
Despite the prospect of another bumper year for the Capital's office market, Grade A availability and the pipeline of new office space remain a major problem. Vacancy rates have come down even further from 3.55% in Q2 to 3.35% in Q3.
Craig Watson, Director at JLL said: "The first nine months of 2018 have once again been very active for Edinburgh's office market, with a number of landmark corporate occupier deals helping to boost the capital's take-up figures. The rapid pre-letting of new stock coming onto the market, such as the Capital House development, underlines the limited availability of prime Grade A stock in the city centre. There simply isn't enough. In the short term, only 2 Semple Street and 80 George Street are capable of providing some limited relief. However, over the longer term, Edinburgh now has its development hopes pinned on the future of The Haymarket, following the sale to M&G earlier this summer. Given the ongoing demand and lack of supply, Edinburgh can expect to see increased activity in west Edinburgh and a continued rise of prime headline rents as competition for prime office space intensifies."