Despite the current economic climate, Edinburgh's office market has made a positive start to 2008 according to the latest Market Watch report from property agents Cushman & Wakefield.

Take up in the first three months of 2008 totaled over 200,000 sq ft. This was particularly good given the fact that there were no transactions over 20,000 sq ft.

With this encouraging start to the year and current demand totaling 700,000 sq ft, the historic annual take up level of 800,000 sq ft has a good chance of being achieved in 2008, according to Angela Lowe, Associate Partner in the Office Agency Department at C&W, which advised on transactions totalling over 25% of take up in Quarter 1.

-- Advertisement --

She said: "Improved demand has also been accompanied by reduction in supply. Vacancy rates have fallen by approximately 2% in the past year and four new Grade A developments, Exchange Place, The Cube, Westport and Quartermile 6 are on site with the earliest scheduled for completion in Spring 2009."

According to the report demand continues to be largely driven by the professional services sector.

Angela said: "There is a real shortage of good quality office space in Edinburgh in all size brackets.

"An occupier seeking Grade A accommodation over 50,000 sq ft only has 3 available options and Waverley Gate is the only building offering large floorplates in the city centre, of up to 36,500 sq ft. As a result of these market dynamics and increasing build costs, we should see headline rents increase to £30 per sq ft this year."

(GK/JM)