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EDINBURGH’S OFFICE MARKET HAS STELLAR YEAR E
dinburgh’s office market was the most active it has been for 16 years in 2017, with well over 1 million sq.ft of space leased by occupiers in 12 months, according to leading property consultancy JLL.
SCOTLAND TEAM STRENGTHENED
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million mark has been surpassed since 2001. JLL were involved in 50 per cent of all deals in Edinburgh in 2017. Total occupier take up in 2017 reached this significant milestone following a number of large transactions. The largest deal of the year, the UK Government’s decision to locate its HMRC hub to Edinburgh, generated a 186,500 sq.ft pre- letting at New Waverley which will house 2,900 civil servants by 2020.
The Mint Building by Chris Stewart Group
Over 1,100,000 sq.ft of office space was transacted in 2017 - a 40 per cent jump in activity compared with the final year-end take up in 2016 - and the first time the
Other notable deals include Standard Life Aberdeen taking 69,000 sq.ft at 10 George Street and State Street leasing 65,628 sq.ft at Quartermile 3. Edinburgh’s reputation as an attractive destination for tech firms continued to grow, making up over 20 per cent of all take up. Australian financial firm Computershare took 41,395 sq.ft at 4 North and fin tech firm Nucleus Financial moved into 18,750 sq.ft at Greenside. The year’s four largest deals were all pre-lets, highlighting the critical supply dynamic in the city. At the end of 2017, the vacancy rate had dropped to 3.8 percent, down from 4.8 percent at the same point in 2016.
ational commercial property company Lambert Smith Hampton
(LSH) has made a senior appointment to bolster its team in Scotland. Retail property expert Tim Appleton will head up LSH’s retail/out of town team throughout Scotland, a newly created post. Appleton is a former director of Colliers, CBRE and Appleton Craig and with 30 years’ experience in the sector, has developed a wealth of knowledge with national retailers, funds and individual clients alike. He has worked on a number of major deals including a flagship acquisition for Blacks PLC in Glasgow and the Motor Park site assembly for Arnold Clark Group in Edinburgh. Commenting on his switch to Lambert Smith Hampton, Tim Appleton said: “LSH has a fantastic reputation, especially in retail with clients like Starbucks and Specsavers, so the opportunity to head up and develop the retail division in Scotland for LSH was one not to be missed. “I’ve been given the chance to retain
my existing ongoing workload, whilst working with LSH’s wider retail team to develop it, and to establish LSH as a key player in the Scottish retail property market”.
PLANS SUBMITTED TO INCREASE NEEDED OFFICE SPACE
he developers of a new office building in Edinburgh’s Exchange District have applied for planning consent to add an extra floor which would help alleviate the Capital’s chronic shortage of office space. GSS Developments (GSS) – who are onsite building 2 Semple Street – said a planning application to extend the building would also ensure it is more in keeping with neighbouring properties in the Exchange. GSS said their application to add a 5000 sq.ft glass-encased sixth floor was on the advice of letting agents and in response to current market conditions where potential new entrants to Edinburgh’s financial centre were being thwarted by a lack of suitable first-class office space.
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The 2 Semple Street building is the only Grade A development which will complete and be ready for occupancy in 2018 and GSS said they were seeking to update their plans and to bring them in to line with other office blocks in the vicinity, such as the seven storey Atria building and the eight floor Capital Square development. Paul Stevenson, GSS Developments
director, revealed a prospective tenant and globally recognised brand had recently viewed 2 Semple Street but would require more space than the 38,600 sq.ft currently on offer if it was to make its first foray in to
COMMERCIAL PROPERTY MONTHLY 2018 Edinburgh.
Mr Stevenson said: “It is widely accepted there is a dire lack of Grade A office space available to rent in Edinburgh city centre and we are delighted that 2 Semple Street is on schedule to be the only development to be ready for occupation next year. “We are seeking permission to add an extra floor as a direct consequence of market demands and to be able to provide a first-class fit-for-purpose office building capable of attracting a quality tenant who will make a significant contribution to Edinburgh’s economic and social fabric. “It has become increasingly clear that a number of businesses looking to move in to Edinburgh or to relocate within the city require a footprint of 40,000 sq.ft or more and we are responding to that demand. “The City of Edinburgh Council was very supportive of our post-purchase design improvements to provide a better floor plate and enhanced stone elevations. With the current need to increase availability of Grade A office space within the financial district, we hope the City Council will maintain that positive approach and see the value in extending the 5th floor glass box to be over two floors. “We recognise that this is unusual,
given that we are onsite and construction is underway, but we believe that this innovative proposition provides a time- sensitive opportunity to create much needed floor space.” As it stands, 2 Semple Street is capable of accommodating up to 350 staff but the proposed extension would provide space for 400 employees and meet the needs of larger potential tenants.
Angela Lowe, senior director at joint letting agent CBRE, said: “An extra 5000 sq.ft may not sound a lot but in a city where there is a lack of floor space it makes a significant difference in securing a broader range of tenants. We advised GSS that increasing the floor space will enhance the flexibility of the building.
“2 Semple Street is one of only a few speculative Grade A office developments to be built in Edinburgh since the 2008 economic crash. If consent is granted for this extension it reinforces the message that Edinburgh is working hard to address high-level occupier demand and to drive economic growth.”
The current development is due to complete in July 2018 and if consent for the extension is granted it is expected the revised scheme would complete in October 2018.
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