The One Lochrin Square building in Edinburgh's Exchange District is being 'defurbished' due to 4.7% fall in vacancy levels across the capital this year.
Investment management company JLL said overall levels have decreased by 17% compared with the same period last year.
With over 62,000 sq ft of Grade A office space over five floors, UBS Asset Management is creating a new enlarged entrance and reception area as well as 'defurbishing' the ground floor.
The work provides stripped back, attic style office accommodation to attract TMT occupiers to the building. The four upper floors will be finished to a traditional landlord's Grade A specification.
The redevelopment has also placed a major emphasis on the provision for cyclists with secure storage and extensive new showers.
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Craig Watson, Director at JLL in Scotland, said: "One Lochrin Square's owners have seized the opportunity to reposition the property within Edinburgh's changing business landscape by providing an open plan finish which has never been speculatively delivered before in the city.
"With 30 per cent of Edinburgh office space take-up so far in 2016 accounted for by the TMT sector, followed closely by Professional Services with only 21 per cent of the market, this refurbishment will ensure that the property stands out from the competition and appeals to some of Edinburgh's younger and more dynamic sectors such as TMT. Edinburgh's commercial property market is faced with a severe shortage of city centre Grade A stock over the next 12 months so the building is well placed to take advantage of any larger occupier requirements."
Toby Withall, Partner at Knight Frank, added: "A refurbished One Lochrin Square of approximately 63,000 sq.ft. will provide an occupier with the only refurbished Grade A office building with its own front door in central Edinburgh.
"In the context of a market where new or refurbished Grade A product is fast diminishing and occupier interest is increasing, One Lochrin Square is set to benefit and ensure there is prime stock for the more diverse range of active occupiers in the Edinburgh market."
The redevelopment is due for completion in December.
(LM/MH)
