Edinburgh prime office rents rise as supply is squeezed

Prime office space under offer in Edinburgh has risen by 5% on 2023 to £45 per sq ft, according to the latest data from Savills. Savills said rental growth has been driven by an ongoing supply squeeze. It found there is 700,000 sq ft of live unfulfilled requirements seeking premium office space in the city, contrasting with just three prime schemes set to be delivered this year offering under 120,000 sq ft of availability. Those developments are 24 St Andrew Square, 30 Semple Street and Clarendon House. Office take-up in Edinburgh hit 649,000 sq ft last year, just 0.9% below 2022’s figure. Savills researchers said that despite the decrease, it remains 0.5% higher than the five-year average for the city, noting that more occupiers are getting to grips with what they need and want from their office space. Savills added that businesses are starting to look up to three years in advance in order to secure good quality office accommodation. Prime and grade-A space accounted for 56% of city centre take-up in 2023, suggesting occupiers are still driven by a flight to quality. Mike Irvine, director in Savills office agency team in Edinburgh, said: “Overall, despite ongoing economic uncertainty Edinburgh has remained resilient. Occupiers now have a much clearer understanding of their requirements and recognise that they need to start their search as early as possible to secure best in class office accommodation. “Given the difficulties around delivering new stock, this should give developers the opportunity to seek prelets to assist with the funding of new space. We will also see landlords refurbish existing buildings to continue to attract and retain businesses.” Mark Walsh, EMEA head of corporate account management, global occupier services at Savills, said: “We’re seeing many occupiers having a clearer understanding of their real estate requirements post-Covid. “Businesses continue to focus their leasing requirements on grade-A offices which have excellent ESG credentials. “This has been driven by the desire to satisfy employee needs and ensure staff return to the office in addition to supporting wider corporate sustainability ambitions.” See lettings information for Edinburgh>> Photo © Paul Brown/REX/Shutterstock