By Ian McConnell
THE vacancy rate for office space across Edinburgh is unlikely to exceed 8.5 per cent, less than half of that in the aftermath of the 2008/09 global financial crisis, analysis by a major property consultancy has concluded.
Knight Frank yesterday declared the Edinburgh office market was in a “strong position to weather the UK’s first recession in 11 years”.
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Knight Frank noted, in 2008, the vacancy rate for Edinburgh offices stood at 12.5%. It observed another 638,000 sq ft of new space had been added to the pipeline over the next two years which, combined with businesses relinquishing accommodation, had led to a vacancy rate of 17.5% in 2010.
It said the current vacancy rate is 6.3% with only 183,000 sq ft scheduled for completion over the next 24 months, “some of which will likely be subject to delays”. It added that the vacancy rate for all grades of office space across Edinburgh should “remain below 8.5% – notwithstanding a sudden deluge of occupiers forfeiting leased space”.
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The consultancy declared Edinburgh’s office market had been “resilient” in 2020, in spite of the “challenges” arising from the Covid-19 coronavirus pandemic.
Its analysis found occupiers are still looking for around 500,000 sq ft of space, with around 417,000 sq ft of Grade A accommodation available.
Knight Frank noted that, in July, “one of the biggest deals of recent years was announced” with Edinburgh fund manager Ballie Gifford “agreeing to pre-let 280,000 sq ft at the Haymarket Edinburgh development for its new headquarters”.
Toby Withall, at Knight Frank in Edinburgh, said: “Despite uncertainties in the wider economy, with the UK officially entering recession for the first time in more than a decade, there are reasons to be optimistic about Edinburgh’s office market. The volume of demand has remained robust, while the supply of new space remains relatively scarce and the development pipeline has been stunted by the effects of Covid-19.”
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