Landlords of older properties in Edinburgh are being forced to work harder to drum up interest amid a continuing lack of Grade A office availability, according to new research out today.
Property consultancy JLL says the "shifting relationship between businesses and their office space" is driving the growing popularity of refits with 130,000sq ft of regears taking place across the city in the third quarter of this year alone. That compares to a total of 170,000sq ft transacted.
The post-Covid shift towards working from home has forced employers to completely re-think their office needs, with many averse to high upfront costs for fitting out their space. At the same time, organisations are also increasingly on the lookout for top-of-the-line energy efficiency to cut down on running costs and burnish their green credentials.
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The situation is further exacerbated by a lack of new Grade A developments in the Scottish capital, with demand for prime space continuing to outstrip supply in city centre locations.
No wonder then that growing numbers of owners of "obsolete" offices are deciding to opt out by putting their buildings to other uses. A couple of recent examples include plans to turn Centrum House in Dundas Street into 49 New Town apartments, and the transformation of 16-20 Castle Street into a boutique hotel with bar and lounge.
JLL says landlords need to "think creatively" about changing occupant needs to drive interest in their stock, particularly when considering the increase in demand for life science, medical, and knowledge sector-based requirements. It cites the example of Tanfield at Edinburgh’s 1 Inverleith Row, where consideration is being given to how the building can be repositioned to offer both high-quality office and laboratory space.
"Identifying and adapting to the changing needs of their tenants will be a key first step for landlords looking to future-proof their investments," JLL director Hannah Done said. "This has been evident where landlords have more seriously engaged with providing fit outs for incoming tenants."
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