A commercial property consultancy has warned that Edinburgh could run out of top-quality office space by the end of 2013, pushing rental prices up by a fifth, if construction does not start soon on new developments.

This has led to a "clear opportunity" for developers, an analyst said.

GVA said supply was dwindling because of a lack of private-sector confidence and because of severe restrictions on finance for new-build projects.

Its report said demand would soon outstrip supply, as there had been a high level of activity in the grade A office letting market in the city over the past year.

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Toby Withall, national markets director for GVA Scotland, said there were just two grade A office sites under construction in the city at present, both on Morrison Street.

Grade A offices are well-finished, often new-builds, and command high rents in city centres from banks, international firms and other high-profile companies.

Mr Withall said: "There is a common misperception in Edinburgh's office market that the credit crunch and banking crisis led to the financial services sector dumping operational office stock on the market. However, this is not the case and in fact the vast majority of the main banks' operational stock remains occupied in both central Edinburgh and out of town. A clear opportunity exists therefore for developers and investors, particularly given the lead in time for construction and site establishment."

(NE/GK)