What is office occupier take up and why is it important?
Occupier take up refers to office transactions (lettings or sales) whereby occupiers have taken office space for their business needs. It is distinct from total take up, which records all office transactions, including those buildings sold for redevelopment.
What are the latest trends in Edinburgh and what does this suggest?
Over the past couple of years there’s been a strong demand for office space close to Edinburgh’s transport hubs. Developments such as Apex at Haymarket and Waverleygate have let up particularly well over the last 12 months on the back of good infrastructure and improving amenity. It is likely that areas such as Haymarket will continue to prove attractive to occupiers, especially now that the tram is up and running and Haymarket Station has been redeveloped. The forthcoming Interserve/Tiger development will further cement Haymarket as a very popular location for occupiers.
We have recently seen a strong resurgence in demand for property in west Edinburgh and Edinburgh Park specifically. 2013 saw fantastic levels of take up on Edinburgh Park – the highest since 1999. The vacancy rate on the Park halved and, with limited supply of large, standalone buildings in the city centre, it has become an attractive option for some occupiers in the window before new developments come on stream in the city centre. These are expected to be available in 2016-2017 at the earliest.
What outlook do you predict for the rest of the year?
We’ve had great first half of the year on the back of generally improving economic sentiment but we’re now seeing the effects of uncertainty prior to the Scottish referendum, which is making a usually quiet summer period even quieter. Occupiers who do not need to make decisions prior to 18 September are delaying. However, on the whole there is still a good churn of smaller deals and we predict levels of take up by the end of the year to be in line with the 5 and 10 year averages.
What kind of businesses are moving/coming into Edinburgh?
We’ve seen activity from a variety of sectors but the most notable recent success story is that of Skyscanner. The firm has expanded dramatically over the last couple of years, in both Edinburgh and Glasgow. The technology, media and telecommunications sector in general has been very active in Edinburgh, with Rockstar North, Zonal Retail Data Systems and Codebase all securing new offices this year and a handful of other firms in the sector with active requirements.
Larger corporate occupiers with forthcoming lease events should be alert to the growing shortage of accommodation in Edinburgh, as there are currently no new schemes under construction. Enabling works have however started at Interserve and Tiger Developments’ The Haymarket, and demolition is now under way to prepare for Standard Life and Peveril Securities’ mixed use development at St Andrew Square. Other future developments will include Artisan’s New Waverley in the east of the city, and further development by Moorfield at Quartermile.