Edinburgh’s Strong 2nd Quarter

Recent research by CBRE Scotland has pointed to a strong second quarter for Edinburgh’s office market, after a slow start to the year. Figures show a Q2 take-up of 351,916 sq ft of take-up – a 150% increase in take-up from Q1 2018, bringing office take-up in the first half of 2018 in Edinburgh to just under half a million sq ft (491,885 sq ft).

The recently announced pre-let to asset management firm Baillie Gifford taking over 60,000 sq ft at the newly developed Mint Building in St Andrew Square was possibly the stand out deal of the quarter, followed by other large lettings including 43,801 sq ft at 11-12 Lochside Place to Diageo and 14,832 sq ft at Atria One to EDP Renewables. The largest deal of the quarter was Edinburgh Palette (a workspace facility) occupying 109,153 sq ft of space at 525 Ferry Road, albeit on a short-term lease.

Metropolis is tracking around 40 occupiers searching for office space in Edinburgh. In general, tenant demand is considered to be buoyant, with a number of existing occupiers approaching lease expiries and seeking to relocate.

Meanwhile in the mid size range: The Scottish Public Services Ombudsman (SPSO) took 16,568 sq ft of out of town space at Bridgeside House, a Smart development at MacDonald Road, while Instant Offices, the serviced office provider, took 2,230 sq m (24,000 sq ft) of offices at the Cornerstone Building in South Gyle.

Total Edinburgh office supply remains at a low level at 923,540 sq ft, with 225,231 sq ft for city centre Grade A space. This represents a 30% decrease on the available space from the same period in 2017. The next scheme to complete is 2 Semple Street in Edinburgh city centre, which is due to be ready for occupation at the end of July 2018,  providing 38,648 sq ft of Grade A office accommodation across six floors.

CBRE say that there continues to be a number of larger, unsatisfied requirements for Edinburgh city centre.

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London Office Lettings in May 2018

Central London office lettings in May 2018 reached over 1.3m sq ft from 45 mid-large size office transactions (5,000 sq ft+) during the month. The May 2018 figure is above the current monthly London average of 1m sq ft.

May was characterised by 14 office deals over 20,000 sq ft, which were led by the Chinesse Embassy’s deal to take Royal Mint in EC3; The Office Group’s 83,000 sq ft letting at One Canada Square, E14 and Epiris Advisers’ 59,000 sq ft at The Forum in Gutter Lane, EC2.

Public Services topped the table of lettings by sector, underpinned by Chinese Embassy deal. This was followed by business services led by a number of lettings by serviced office operators. Financial services, technology and media were also well represented. Office deals ‘under offer’ in central London increased to 3.4m sq ft, and pending deal volumes are healthy in nearly all sub-markets, with a large number of deals pending.

By area, the City accounted for 70pc of the office floorspace let in April 2018 at 912,,000 sq ft. The West End saw 209,000 sq ft of take-up. Midtown contributed 57,000 sq ft of lettings, plus 83,000 sq ft of Docklands deals. Current London office demand is calculated to be around 3.2m sq ft in the City and 2.6m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 1m sq ft sq ft (77% of the monthly total), as transactions for new space resumed their recent strong showing. Availability is dominated by secondhand space in all London markets.

Metropolis research is currently monitoring 640 ‘live’ London requirements, with deals for space of up to 1.8m sq ft due to sign in the next few months.

Cityoffices is working on its current ‘Skyline Survey’ in London. Further details of office scheme planning applications and consents, with scheme by scheme detail are listed on the Cityoffices.net website. Details on the report and the Cityoffices database from Andy King at andy@metroinfo.co.uk