Take-up

Q1 2023 take-up totalled just under 90,000 sq ft in Edinburgh city centre. This was in line with the five-year Q1 average for the market. Take-up was spread across 30 completed transactions, which was up on the five-year average Q1 deal count by 15%.

Grade A take-up was just under 35,000 sq ft, which accounted for 38% of the overall total in the quarter. There were seven completed Grade A transactions, the largest being the 9,650 sq ft letting to Ofcom at Quartermile One.

Supply

Total availability at the end of Q1 stood at 940,000 sq ft. This represented an increase of 26% on the Q4 2022. This was in part caused by an increase in smaller units that were made available during the quarter.

Prime availability was 160,000 sq ft at the end of Q1. This was a significant increase compared to Q4 2022 with the whole building at 6 St Andrews Square returning to market which added 110,000 sq ft on to the Prime supply total. Even with this addition, there is just 0.6 years of Prime supply available based on average Grade A demand.

Take-up by business sector

The ‘TMT’ sector was the most active in Q1 2023, accounting for 24% of total take-up. Take-up was spread across seven completed transactions, which was 75% above the five-year average Q1 deal count for the sector.

Elsewhere, ‘Extraction & Utilities’ was the second most active sector, accounting for 23% of take-up. 70% of this take-up was recorded at 2 Lochrin Square, with Orsted and Falck both leasing a floor in the Grade A building during Q1.

Rents

There was a 1% increase in the prime rental tone in Q1 2023, which currently stands at £39 per sq ft at the end of Q1. Savills is aware of space currently under offer at £42.50 per sq ft and fully expects the prime rental tone to be established at this level by the end of 2023. Looking further forward, the five-year outlook for the market is optimistic, with the latest forecasts predicting that the prime rent will be at or above £45 per sq ft by the end of 2027.

Interested in other areas of the UK?

View all of our latest Q1 2023 Occupational Office Data research here.