Developers Choose Residential

While the recession has hit office development hard in Edinburgh with only one scheme under construction, the residential side is more robust with the Drivers Jonas Crane Survey reporting 16 new schemes being built. There is only one commercial scheme due for completion in 2011, the 5,106 sq.metres building on the Shawfair Business Park which is pre let to the Scottish Qualifications Authority. Drivers Jonas reports that the large amount of space that came onto the market in 2009 is being whittled down so that the vacancy rate is now 7%. So clearly there is a shortage of Grade A space looming in 2011 and 2012.

The public sector has played a large part in the new lettings this year. As is to be expected in such a situation, tenants are in control so that landlords have to fight for deals, hence a 10% decline in prime rents to £279.76 a sq.metre. The worst could be over with Drivers Jonas forecasting stable rents and a decline in incentives in 2011. One thriving sector is student accommodation where developers and investors are particularly active at the moment. Drivers Jonas commented: “With a large student population and increasing international student population, demand in the city remains strong.”

At least there has been more activity in the business parks with the Royal Society for the Protection of Birds (RSPB) relocating to Edinburgh Park at 2 Lochside View. Duncan Orr Ewing of RSPB said: “As a conservation charity concerned about climate change, we have targets for reducing our carbon emissions and a more efficient office will help us in part of these efforts.”

Most of the deals in Edinburgh have been small, although Edinburgh Technopole continues to attract new tenants. The latest is Lead Generator whose Ian Murphy said: “Dealing with clients such as KPMG and Genesis Scientific was the driving force behind our move to the Technopole as Bush House provides the state of the art technology required to fulfil my clients’ day to day demands.”


The Scotland Commercial Property Register

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