OFFICE rents are due to reach an all-time high in the Scottish capital this year, it is claimed.
According to Savills, an acute lack of supply in Edinburgh’s city centre will push office rents north of £35 per sq ft in 2019.
The advisor suggests that while occupier focus in the year ahead will remain on the city centre, rental increases and lack of supply may cause certain organisations to consider opportunities on the city’s western periphery.
The latest research from the firm shows office take-up in Edinburgh in 2018 totalled 950,000 sq ft - 18 per cent ahead of the ten-year annual average – as the city continues to see robust levels of demand from across a number of key sectors and a continued focus amongst occupiers on the city centre.
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However, despite strong occupier demand, Savills figures show a decline in office take-up in 2018, compared to 2017 - 1.04 million sq ft - which the firm attributes to a lack of good quality, city centre office supply.
The firm said Edinburgh’s city centre office availability has been reducing since 2012.
Office rents in the city are also being impacted by a lack of supply and rising build costs, says Savills, with significant rental growth through-out 2018. The firm’s research shows the top rent in Edinburgh now stands at £35 per sq ft and Savills expects the upward trajectory to continue in 2019.
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This is set against Glasgow, where Grade A availability dropped to 280,000 sq ft, marking a 34% fall on 2017 levels, and rents climbed to £32.50 per sq ft.
Mike Irvine, director in the Scottish office agency team at Savills in Edinburgh, said the supply of land remains severely restricted, adding: “Rising build costs are a further contributor to this trend.”
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