Market snapshot

Office Market Pulse Edinburgh Q1 2013

Findings from our latest Edinburgh Office Market Pulse highlight a positive start to 2013, with a 148% increase in enquiry levels for city centre office space compared with Q4 2012.

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In this issue:

Increase in enquiry levels for Edinburgh office space

Take-up of office space in Edinburgh city centre totalled 201,782 sq ft in Q1 2013, a slight decrease on the 240,602 sq ft recorded in the same period last year.

Q2 take-up levels are expected to show further improvement following an increase in enquiry levels. In Q1 alone, 62 new requirements for office space were recorded in the city centre, compared with 25 in the final three months of 2012.

The largest deal involved 36 & 38 South Gyle Crescent (26,357 sq ft) which was purchased by Napier University.

Activity in the out of town market increased in Q1 with seven deals transacted, accounting for 32.5% of the total take-up figure.

For a detailed breakdown of Q1 2013 Edinbugrh office take-up by grade, please click here or on Chart 1 to the left of this article.

Key Edinburgh office transactions Q1 2013

Property  Size Landlord(s)  Tenant / Purchaser 
36 & 38 South Gyle Crescent 26,357 sq ft South Gyle Park Property Investment Napier University
Hayweight House, Lauriston Street 19,378 sq ft CIP Property (AIPIF) Nominee SAMH
Ratho Park 18,977 sq ft EDI Group Cheque Centres
Atria, 144-148 Morrison Street 12,338 sq ft The City of Edinburgh Council Green Investment Bank
Saltire Court, Castle Terrace 11,550 sq ft Goodwill Nominees ACH Shoosmiths
Wallace House, Lochside Avenue 10,181 sq ft VRS 2 LTD Logica

Source: Lambert Smith Hampton

Interserve’s Haymarket scheme to boost Edinburgh’s office availability

Total office supply across Edinburgh currently stands at 3.3m sq ft.

Of this availability, just 15.7% is considered to be of Grade A quality and 21.32% is located out of town.

Interserve and Tiger Developments have announced they will commence regeneration on the city’s Haymarket site.  The £200m development will bring together a mix of high quality Grade A office, hotel and retail space.

For a breakdown of Q1 2013 Edinburgh office supply by grade, please click here or on Chart 2 to the left of this article.

Edinburgh’s Atria development commands city’s highest rents

Average headline rents for Prime Grade A stock within the city centre remain largely unchanged at circa £27.00 per sq ft, with the completion of the Atria development on Morrison Street being the exception to this with quoting rents on some suites as high as £32.00 per sq ft.  

Large incentive packages continue to skew net rents figures to a significant extent.

Lack of Grade A space currently available / under development is forecast to shortly result in a recovery in rents and a reduction in incentives in this segment of the market.

Out of town, headline rents are sub £14.00 per sq ft, with net rents significantly lower as existing tenants offer substantial incentive packages whilst they seek to offload existing lease liabilities.

For a breakdown of Q1 2013 Edinburgh office rental values, please click here or on Chart 3 to the left of this article.

How did the national investment market perform in Q1 2013?

Total investment volumes in Q1 2013 rose by 8% in comparison to the previous quarter, reaching £8.05bn. 

The average deal size reached a new high of £28m. 

This activity was despite investment in central London offices falling by 25% in Q1 2013.

What does this mean for the market? Find out in UKIT 2013 and read our predictions for the year ahead.

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Ian Davidson

0131 226 0328

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Ian Davidson
Director - Head of Office - Edinburgh

0131 226 0328

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