Edinburgh office take-up leaps in second quarter with professional services most active sector
Property experts have pointed to a “highly encouraging” increase in the take-up of office space in Edinburgh as the economy re-opens.
Office take-up increased nearly 80 per cent in the second quarter of 2021 compared to the opening three months of the year, according to the latest analysis from commercial property consultancy Knight Frank.
It found that some 160,000 square feet of space was transacted between April and June, up significantly on the 90,000 sq ft of take-up in the first quarter of 2021 and just 10,900 sq ft during the same period last year – at the height of the first lockdown.
Professional services was the most active sector, while the Nursing and Midwifery Council’s 11,500 sq ft letting at 10 George Street was the largest deal of the quarter. The average letting size was 4,100 sq ft.
There was also a large number of re-gears and lease renewals during the second quarter, which amounted to some 58,000 sq ft of office space.
The firm said that, with lockdown restrictions easing, demand for space remaining “consistently high”, and people likely to start returning to offices in earnest towards the end of the summer, there could be a “significant” uptick in take-up activity from September.
Toby Withall, office agency partner at Knight Frank Edinburgh, said: “The second quarter of 2021 has built on the positive start we saw during the first three months of the year.
“It is highly encouraging to see so many businesses commit to office space, underlining the cautious optimism that has emerged with lockdown easing, the economy gradually re-opening, and companies looking beyond the pandemic.
“Part of the rise in activity can also be attributed to a number of the deals that were delayed by Covid-19 starting to conclude, with the handbrake coming off decision-making and office activity likely to increase after the summer.
“This suggests that, although many occupiers understandably put commitments on hold during lockdown, offices remain a key part of their business plans, even if working from home still plays a part in how they operate in the future.”
Withall also pointed to “clear office trends” emerging from the pandemic, adding: “More collaboration space and amenities for staff are becoming increasingly important for occupiers, along with the sustainability and energy efficiency of their property footprint – all of which will be important for landlords to keep front of mind.”
Last year, Edinburgh saw 490,585 sq ft of take-up and a new headline rent of £37 per sq ft was set in the city, despite the economic uncertainty caused by the pandemic, according to Knight Frank.
Demand for office space in the city has remained robust throughout the pandemic, property experts noted – with some 500,000 sq ft of requirements still on the market despite the shift to home and blended working practices.
The development pipeline has, however, continued to be restricted, with 281,000 sq ft of new space under construction.
Simon Capaldi, office agency partner at Knight Frank Edinburgh, added: “If anything, the flight to quality that took hold last year has only increased.”