The search is on for new office space in capital

With a brisk 200,000 sq ft take-up in the first quarter of 2015 and more landlords, developers and occupiers assessing property options, the firm reports a pick up in the number of new requirements from companies looking to relocate this year or later.

The largest lettings so far involved Baillie Gifford taking 22,292 sq ft at Calton Square, Audit Scotland 15,188 sq ft at Westport 102, Logic Now 13,918 sq ft at 7 Exchange Crescent and Whitespace 12,400 sq ft at Norloch House.

Peter Fraser of GVA said: "With 89 per cent of deals concentrated in the city centre, coupled with limited new stock, supply levels are tightening and this raises concerns about Edinburgh reaching a tipping point in the market.

"Our view is the balance is finely weighted. At the moment there is 390,000 sq ft of Grade A or Grade B+ space, just over 100,000 sq ft of it under offer. That leaves us with just over a year's worth of take-up.

"In addition there is some 445,000 sq ft of city centre lease expiries to come over the next three years that have not committed to a re-gear or relocation."

Fraser says developers are reacting, with 320,000 sq ft under construction at Haymarket, Quartermile and 8 St Andrew Square - albeit the 108,500 sq ft being created at the last of these is pre-let to Standard Life.

In planning, or already with consent, are New Waverley, Skyparks, West Register Street and Freer Street, and it will be the ability to deliver these schemes quickly that will determine how aggressively the scales tip in the landlords' favour.

He points out that 250,000 sq ft of offices have been lost to alternative uses such as hotels, serviced apartments and student residential in the past three years, and predicts a further 165,000 sq ft of potential refurbishments will also go that way.

In response, a number of companies known to be in the market to move have picked up the intensity of their office searches - including KPMG, Amazon, Ernst & Young, Simpson & Marwick and Brodies.

Market rumour suggests E&Y has already settled on the locational advantages of a base in Interserve/Tiger Developments soon to be built at Haymarket, while outsourcing giant Capita is under offer on Ediston Properties' 27,000 sq ft nearby 145 Morrison Street, completed two years ago and projected to have an end value of around £10m.

The city's commercial property agents themselves are doing their bit to stimulate the market, with two of the main players on the move.

After 10 years in George Street, Colliers International has decided to up sticks and move into the higher specification former Standard Life space at Exchange Crescent, taking 1285 sq ft on the second floor, where the quoting rental was around £25 per sq ft.

The Herald also understands that leading Scottish-owned practice Ryden will also be leaving its townhouse tower in Castle Street for the same part of the Exchange business district.

Aberdeen-based managing partner Bill Duguid, who took over from Fiona Morton two years ago, has made no secret of his desire to see the capital operation, currently split over multiple levels, move to a more modern open plan set up with everyone on the same floor.

Ryden would only say it had narrowed down the selection to a number of options but declined to confirm the deal at this stage.

It is understood its current office base will revert to its original residential use.

Apart from Sainsbury Bank's 83,000 sq ft occupation of the former Aegon offices at Lochside Park two years ago, it is a long time since there was a major inward investment into the capital, with Glasgow being much more successful in this regard.

But it is known that there is a live requirement for up to 160,000 sq ft, with a report on options being prepared for the start of June. Front runners are expect to include Haymarket, New Waverley and Edinburgh Park.

HEALTHY OUTLOOK

THE rejuvenation exercise at Motherwell Shopping Centre is looking fit and well with the impending arrival of round-the-clock operator Pure Gym.

The low-cost fitness expert is to take a 15-year lease of 17,500 sq ft at first floor level at Brandon Parade South, overlooking the main shopping centre car park and a new KFC drive through, which opened last weekend.

Established by leisure entrepreneur Peter Roberts in 2009, Pure Gym is the UK's leading affordable chain, offering low cost memberships without the need for a contract.

The £1m fit-out of the gym gets under way this month ahead of an opening this summer. Pure Gym, which will offer free car parking for up to two hours for gym members, is the latest in a line of big name retailers attracted to the centre over the past 18 months, including Vodafone, KFC and Store 21.

Gavin Anderson, retail partner at Montagu Evans, who advised landlords Motherwell Investment Ltd Partnership, said: "This is a very exciting time for the shopping centre, with footfall continuing to rise. We will be announcing more new lettings very shortly."