Take-up

Q4 2022 take-up totalled 240,000 sq ft for the Edinburgh city centre market. This took the annual city centre take-up total for 2022 to 507,000 sq ft. The largest transaction in Q4 was the 139,000 sq ft acquisition by BlackRock at 20 Brandon Street. This was comfortably the largest transaction of the year in the Edinburgh city centre market.

2022 Grade A lettings, totalling 166,000 ft, accounted for 33% of overall take-up for the year. This take-up was spread across 23 lettings which represented an increase of 53% on the number of completed.

Supply

Total city centre supply stood at 744,000 sq ft at the end of 2022. This meant that total supply increased by 7% in 2022, but much of this total is made up of second-hand Grade B stock that Savills deems unlikely to let without refurbishment.

Grade A supply stood at 242,000 sq ft at year end, which is in line with the Grade A availability at the end of 2021. That said, there is now just 66,000 sq ft of prime Grade A supply in the market, and with a prime Grade A vacancy of just 0.7% the supply for best-in-class product remains constrained in the Edinburgh city centre market.

Take-up by business sector

The Insurance and Financial Services sector was the most active in 2022, accounting for 31% of total take-up. This was spread across 12 completed lettings and was largely driven by the 139,000 sq ft acquisition by BlackRock in Q4.

Elsewhere, the Professional sector was the second most active, accounting for 25% of take-up. The largest deal of the year was the 21,000 sq ft Grade A letting to Anderson Strathern at Capital Square. Professional was the most active in terms of deal count, with its 24 completed lettings coming at an average deal size of 5,333 sq ft.

Rents

There was no change in the prime rent during 2022, which currently stands in excess of £38.00 per sq ft, although this is in part due to stock issues. The prime rent has increased by 13% since 2016, and Savills anticipates significant growth in rents for prime Grade A offices moving forward. There are a number of deals currently under offer at £42.50 per sq ft, as well as indicative quoting rents on prime refurbishments due to complete in 2024 at £44 per sq ft. Average Grade A rents have also grown significantly since 2016. In 2022, the average Grade A rent of £34.75 per sq ft was 18% above the pre-pandemic 2019 Grade A average of £29.50 per square foot.

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View all of our latest Q4 2022 Occupational Office Data research here.