Edinburgh office market ends 2010 in good shape

Take-up of office space in Edinburgh ended 20% higher than in 2009

Article posted: 21 Jan 2011

According to research published this month by global real estate services firm DTZ, Edinburgh’s commercial property market ended 2010 on a high note, with an increase in take-up of office space in Edinburgh city centre, 20% higher than 2009 and just 10% below the five and ten year averages.

Take-up in Q4 reached nearly 210,000 sq ft, which notably included the acquisition of 100,000 sq ft by Tesco Bank at EHQ, South Gyle. Other significant deals for the period October to December included Craneware’s relocation to Carlyle Group’s Tanfield and Baillie Gifford’s expansion into The Cube, Leith Street (pictured).

Although there have been budget cuts, the public sector remained active, with COSLA relocating from Roseberry House into nearby Verity House. Positively, the number of deals during Q4 was 10% above the average for this period and for a city underpinned by financial services, this employment sector saw good levels of activity throughout the year.

While 2010 proved to be an uncertain year, with a UK general election, budget cuts and the underlying uncertainty of the banking sector, DTZ believes that the recent period of falling rents and increased incentives has enabled occupiers to secure some of the best deals available over the past decade.

Looking ahead to 2011, supply levels are expected to remain balanced, with limited releases of surplus accommodation and no new build space to be delivered until 2012. DTZ remains cautiously optimistic with reports that the financial services sector has stabilised and is now growing in parts. DTZ research also suggests that public sector cuts in Edinburgh will be some of the lowest in the UK, although uncertainty still exists around impending spending cuts following May’s Scottish general election.

Overall, DTZ expects to see a slight fall in total take-up for 2011 as a result of the contraction of the public sector, but remains positive on the continued emergence of the financial services sector, particularly with the likes of Virgin Money joining Tesco Bank as an expanding employer within Edinburgh.

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Posted by Jules