Edinburgh office space enquiries on target for 2009 3rd quarter
Office space enquiries for Edinburgh, as recorded by officebroker.com, show that 2009’s Q3 has produced the highest monthly enquiry volume of the year so far. July contributed over 16% of total Edinburgh enquiries for 2009 to date, while August’s enquiry figures are in line with 2009’s monthly average.
The below graph shows the pattern of enquiry figures for office space in Edinburgh for 2009 to date:
Percentages represent the portion of monthly enquiries out of the total number of Edinburgh enquiries for 2009 to date.
The above graph shows that enquiry levels for Edinburgh have remained fairly consistent throughout the first two quarters of 2009. Figures then peaked sharply on entry into the third quarter, producing the highest monthly enquiry volume of the year to date.
According to officebroker.com statistics, the monthly average for the first eight months of 2009 (as per the above graph) is 12.5%. Q3 is currently performing well, with July and August producing 16.5% and 12.1% respectively, therefore suggesting a positive outlook for September and the remainder of Q3 overall.
Office space take-up in Edinburgh up in Q2
External reports by Cushman & Wakefield and Jones Lang LaSalle show that take-up of office space in Edinburgh was up in the second quarter of 2009 when compared to the first.
Cushman & Wakefield state that take-up of prime office space in Edinburgh almost doubled in the second quarter of 2009, which they suggest could be as a result of Grade A rental values in Edinburgh, which have dropped to ┬ú28.50 per sq ft, bringing the city on a par with Glasgow and Manchester.
Jones Lang LaSalle states that office occupier activity in Edinburgh increased by 39% in the second quarter of 2009, when compared to the first quarter. JLL suggest that amid increasingly competitive rental costs, landlords are becoming more flexible in order to secure tenants, with reportedly some of the “best incentives for 10 years” (Property Week). In addition, JLL research shows that occupier take-up for Q2 2009 is down just 15% on the same quarter in 2008, suggesting resilience against the decline.
Incentives help to boost Edinburgh office space market
According to CB Richard Ellis, incentive packages for office space in Edinburgh “are becoming increasingly favourable” for prospective clients.
While this is helping to boost both enquiries and take-up office space in Edinburgh, this is also having a knock-on effect on office providers and landlords, who are forced to offer increasingly attractive terms in order to continue operating in a competitive market.
CBRE predict more office space take-up activity over the next 6 – 12 months in Edinburgh, as Virgin Money, the National Trust of Scotland and Agilent Technology are all reportedly looking for office space on leases for between 15,000 and 30,000 sq ft. Demand from the public sector should also support take-up levels.
From a serviced office perspective, Edinburgh looks optimistic for the remainder of Q3 based on positive enquiry levels at the start of the quarter. The first month of Q3 (July) produced the highest enquiry figures of the year so far, while August was in line with the monthly average.
These findings support some claims that parts of Edinburgh’s commercial property market may be turning a corner. Keith Hutchison of CB Richard Ellis (Scotland) says:
“There were signs in Q2 that some confidence was returning to the investment market, and indeed there has subsequently been some yield improvement in July and August for prime, well let product.” He also adds that a recent PMI survey suggests a return to positive growth for the Scottish economy in Q3 2009, which “may be a positive signal for the occupational markets going forward.”
For more details on serviced office space in Edinburgh, start searching at officebroker.com or speak to one of our regional office space experts for free help and advice.
Related officebroker.com blog articles:
- Edinburgh office space take-up doubled in Q2
- Network Rail plans could boost take-up of office space in major UK cities
- Recession busting Edinburgh ahead of other UK cities