Edinburgh office rentals ‘to exceed 1m sq ft’

Rental take-up in Edinburgh’s office market is expected to exceed 1 million square feet for 2015, as tech companies and banks drive demand, according to real estate firm Savills.

This volume would be a 7% increase on 2014 and includes 150,000 square feet currently under offer and expected to be signed before the end of the year.

A lack of new stock coming onto the Edinburgh market has forced occupiers to act quickly, Savills said.

Fantasy sports game operator FanDual has pre-let 59,000 square feet at the new Quartermile 4 development near The Meadows, where Cirrus Logic, which makes audio chips for Apple, is also expected to sign up for 70,000 square feet by the end of the year.

Quartermile 4 is expected to be completed in the spring of 2016.

Meanwhile, JP Morgan and HSBC have both expanded at Edinburgh Park, driving demand on Edinburgh’s west side, including South Gyle Business Park.

Rents in Edinburgh West are about 40% less than similar Grade A quality properties in the city centre, Savills said.

Grade A rents in Edinburgh city centre are now reaching £32.50 per square foot.

“This has been a noticeably strong year for Edinburgh’s office take-up and the level of activity at West Edinburgh, in comparison to recent years, demonstrates the health and depth of the market,” said Kate Graham of Savills Edinburgh.

“Looking ahead, we anticipate rents to continue rising in 2016 where they could reach £34 per square foot for the best quality stock and a continued reduction in rental incentives.”

Deals that Savills expects to be completed before December 31 include Cirrus Logic’s pre-let at Quartermile 4, Amazon extending to 70,000 square feet Waverley Gate — the old general post office HQ opposite the Balmoral Hotel — and HSBC’s 30,000 square feet at Edinburgh Park.