DEVELOPER Dunedin Property has bitten the bullet at its South Gyle Business Park, Edinburgh, by cutting its rents by 19 per cent in what could be a rents war if other agents are forced to follow suit.
None at the moment has indicated a similar move, but one has come up with a euphemism for cutting rent: more flexibility.
The rents at South Gyle have been slashed to £16 per sq ft by agents Ryden and King Sturge. The park has recently been ref
urbished, and the agents say it is hoped that the reduction in rents will help to counter the effects of the credit crunch and attract tenants.
A total of 9,877sq ft of vacant office space remains, which can be split into suites from 2,475 to 6,175sq ft and is available on "very flexible" terms.
Dunedin acquired the business park in December 2004 and subsequently refurbished the majority of the buildings. As a result, a number of top-quality tenants were secured, such as Chubb, Initial Rentokil, Farrer Consulting and ICON Clinical, but a lot of space has still to be taken up.
Peter I'Anson of Ryden said: "I'm convinced that this approach will generate a lot of enquiries for the remaining space. This rent is now the lowest by a considerable margin in the South Gyle/Edinburgh Park location for quality accommodation, with generous car parking at one space for every 281sq ft. We're confident that we will secure a number of new lettings on the back of this.
"I think it sets a benchmark for the rest of the market. This is one landlord's reaction to the market – Dunedin would rather see income coming in than hold out for every last penny."
At the other end of the city there is a vast amount of space still looking for occupants after being on the market since early 2005 – the £100 million speculative Waverley Gate 210,000sq ft development by Castlemore.
Microsoft has taken about 13,000sq ft and officially opened its office last week. It is paying £31 per sq ft – a record for Edinburgh – for half the fifth floor (3,700sq ft) and about £29 for more than 9,000sq ft on the fourth floor.
It sees itself as a great advocate of the building and its energy-efficient and environmentally friendly development. The Microsoft corporate vice-president Bob McDowell said: "I hope the building fills up. We would rather be in a full building – we took the risk and we hope that will encourage more people to see the possibilities."
These sentiments are undoubtedly shared by Nigel Crump, spokesman for the developer, Castlemore, who said they were showing two or three parties a week around the building.
He added: "Microsoft has been very good in letting people see around the building. It is bringing in a lot of global partners to look around. If you reckon you have the product right, time and depth of pocket will get you through. We have the right product and we are patient people."
The agents are Montagu Evans, Jones Lang LaSalle and Cushman and Wakefield. Ben Reed of Jones Lang said they were taking a "more flexible" approach in the current market. He explained: "We can be all things to all men, more flexible in terms of the space that can be rented and we can offer a broad range of rents."
Since taking over its Waverley Gate space earlier this year, Microsoft has substantially redeveloped it to suit its needs and convert it into a technology centre – one of only 17 that it has worldwide.
ClinTec HQ moves to Finnieston StreetCLINTEC international, the clinical research company with services in more than 30 countries, has completed its move into new global headquarters in Glasgow in 6,500sq ft at the FM Developments building in Finnieston Street, joining international banking and insurance firm Fortis UK, which moved into three floors earlier this year. ClinTec is paying £18.50 per sq ft and has also taken a number of apartments in the adjoining FM Homes building, Skyline. Ryden and Cushman & Wakefield are the agents.
A MAJOR deal at Livingston on behalf of the Ian Wright Property Group, Graham & Sibbald has signed up Night Freight GB for 25,000sq ft at the Oakbank Industrial Estate on a 15-year lease with no breaks at the starting rental of £5.50 a sq ft enhanced by a guaranteed 2.5 per cent yearly compounded rental increases – seen by the agent as a "different slant" in testing economic conditions.
INTERNATIONAL wind energy developer Wind Prospect Group, advised by King Sturge, is to move into 13 Rutland Street in Edinburgh, relocating from smaller offices in Castle Street. It has taken a ten-year deal on the 2,345sq ft townhouse office building, over four floors. The annual rental is £40,000 (£17 per sq ft). Montagu Evans acted for the landlord, a private investor.
THE former McGowan Toffee factory in Stenhousemuir has been bought by a pension fund for £1.5 million. The building was sold by Greeba Enterprises, represented by Edinburgh lawyer Davidson Chalmers, and the new owner is the Thornycroft Pension Fund, represented by MacDonald Henderson.
THE Equality and Human Rights Commission has given up two offices in Edinburgh totalling 7,754sq ft. The first deal was sealed by GVA Grimley when the commission moved out of 3,989sq ft at Riverside House in Gorgie Road and Lloyds TSB, which already had the first floor in the building, was happy to take the second. The commission has also vacated the 3,765 sq ft second floor suite in The Tun and has appointed GVA as the sole agent for the letting of the suite.
CATTLES Invoice Finance has taken the 3,440sq ft fifth floor at 100 West Regent Street, Glasgow, at £16.25 per sq ft and will relocate from its current base in St Vincent Street. GVA Grimley and Winton Faith did the deal on behalf of CCLA Investment Management.
Send deals details to jimdow@lumison.co.uk
