Take-up

Q4 2021 take-up, totalling 283,619 sq ft, was the highest quarterly total in 2021 and the third highest quarterly take-up recorded in the last five years. This was driven by eight lettings over 10,000 sq ft, with significant deals including Cairn Energy 33,000 sq ft, Shepherd and Wedderburn 30,000 sq ft, Deloitte 16,300 sq ft and Flutter 59,000 sq ft. Savills was involved in three of these four deals.

Grade A lettings, totalling 277,313 sq ft, accounted for 43% of overall take-up in 2021, which was 2% higher than the pre-Covid 2019 Grade A take-up proportion of 41%.

Supply

Total supply at the end of Q4 stood at 694,331 sq ft. This represented a marginal increase of just 2% on the 2020 figure. Conversely, Grade A supply notably decreased by 17% to 299,331 sq ft at year end.

In terms of vacancy rate, total vacancy rate increased by 0.2% to 7.6%, whereas Grade A vacancy rate decreased by 0.6%, standing at 3.3% at the end of 2021. This decline in Grade A vacancy rate is indicative of the diminishing availability of prime space within the market.

Take-up by business sector

The TMT sector was the most active in 2021, achieving 190,309 sq ft of lettings, which accounted for 29% of overall take-up.

It was also a strong year for the Insurance & Financial Services sector which recorded 16% of overall take-up. This was significantly boosted by the 61,000 sq ft letting at 20 West Register Street by FNZ.

Elsewhere, the Professional sector increased its overall share of take-up to 9% in 2021 after recording just 2% in 2020.

Rents

Prime rent increased by 7% in 2021, which currently stands in excess of £38 per square foot. This follows the growth trend for Edinburgh prime rental values which have increased by 17% since 2015. Equally, average Grade A rents have increased significantly over the past six years. The average Grade A rent in 2021 was £33 per square foot, representing an 11% increase on 2020 and 12% on 2019.

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