A lack of new office developments is threatening Edinburgh’s growth according to research, with a shortage of Grade A office space said to be deterring larger firms from taking up residence in the city.
Reported in The Scotsman, the research from commercial property agency Jones Lang LaSalle (JLL) explains that the lack of new office developments has seen vacancy rates fall to 7% – limiting the options available to existing occupiers across the city and other businesses considering the Scottish capital as a location.
“There has been a fairly noticeable squeeze on supply and particularly for the best-quality space in the city centre. An occupier looking for 50,000sq ft would have little choice.” explained Ben Reed, director of office agency at JLL.
“If Atria and (nearby development) Exchange Place were to fill up over the course of the next year then there is really very little of significant size in the core city centre that one of these larger corporates could move into. Potentially, we could lose out on an inward investment of that scale.”
The reduction in the number of commercial developments has been a legacy of the recession, raising the same concerns highlighted in the JLL report across the UK – notably in Central London and Birmingham.
In Edinburgh’s flexible office market, from which Tesco, a significant occupier, relocated to a centralised office in the closing months of 2011, the opening quarter of 2012 has started positively – with a 33% increase in the number of individual firms moving to serviced office space during January and February.
Early signs do however suggest that the cost of serviced office space in the City Centre has decreased, falling from an average of £303 per workstation per month to £216 during the same 2 month period of 2012.
Full details and quarterly analysis will be published later this month when officebroker.com’s Serviced Office Review Series is published.
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