Edinburgh office leasing up but still hampered by Covid
Despite office market take-up rising by more than a quarter in Q1, Edinburgh’s office sector is still being hampered by the long-lasting effects of the Covid-19 pandemic.
There was 92,182 sq ft of city centre office take-up in the first quarter of the year – up by 27.5% when compared with Q1 2024, according to research by Knight Frank.
The quarter saw 33 deals, a rise of 26.9%, with IT and telecoms and the professional services sectors being joint most active, with both accounting for 15% of the total space transacted.
Despite office market take-up rising by more than a quarter in Q1, Edinburgh’s office sector is still being hampered by the long-lasting effects of the Covid-19 pandemic.
There was 92,182 sq ft of city centre office take-up in the first quarter of the year – up by 27.5% when compared with Q1 2024, according to research by Knight Frank.
The quarter saw 33 deals, a rise of 26.9%, with IT and telecoms and the professional services sectors being joint most active, with both accounting for 15% of the total space transacted.
Availability in the centre of the city remains right, with a vacancy level of 0.37% for new grade-A space and 6.67% overall.
No new or refurbished space is set to be delivered in the next few years, though there is 882,000 sq ft of refurbished space which could potentially join the pipeline in the future.
Toby Withall, office agency partner at Knight Frank Edinburgh, said: “Edinburgh’s office market has posted a healthy quarter, despite the well-publicised challenges many businesses currently face. Supply remains constrained and there is little coming through imminently to absorb occupier demand, which remains relatively resilient.”
The quarter, however, saw the number of regears drop to 22,849 sq ft, which Knight Frank said was a delayed impact from the pandemic five years ago, when occupiers were more hesitant to commit to leases.
“It is five years since the pandemic brought a halt to the market and lease terms were put on hold or extended for shorter than usual periods of time,” said Withall. “Most occupiers commit to 10-year leases with a break at year five, which will mean there are fewer expiring this year.
“While that may subdue the market in the remainder of 2025, along with the impact of an uncertain macroeconomic and geopolitical backdrop, there are good reasons to be optimistic longer term. Prime rents are rising amid a restricted development pipeline, and occupiers continue to seek out quality space that aligns with their wider business objectives.”
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