EDINBURGH'S office market was the worst in the UK last year, with the largest yield shift of any big city, according to the latest UK Key Cities Research report by Drivers Jonas.
Alasdair Ramsay, head of Drivers Jonas in Scotland, says that, in a turbulent office market across the UK, Edinburgh this year will also have the largest amount of space completed in the city in one year (600,000sq ft).
With low levels of availa
bility and Edinburgh's city centre to some extent relying on the financial services sector, demand is expected to be weak. Occupiers will no longer be location-driven and there will be a return to cost-sensitive, demand strategies.
Given that description of the unhappy Edinburgh office market, it might seem inopportune for the British Council for Offices (BCO) to be holding its annual conference in the city next month.
For three days about 600 delegates representing all disciplines of the property market will see what the city has to offer while they debate the changes in the industry.
There will be time for a little golf and visits to places such as the RBS headquarters at Gogarburn and the Scottish Parliament. It might, in fact, be an opportune time to showcase the city to some of the biggest players in the industry.
Cameron Stott, director at Jones Lang LaSalle and chairman of the Scottish Chapter of the BCO, stoutly defends the choice of Edinburgh as the venue – the first time it has been in the UK since Manchester in 2004. Edinburgh will be the only city in the UK to have hosted the conference three times since the establishment of the BCO in 1990.
Stott said: "I get a bit peeved at newspapers bashing Edinburgh when other cities such as Manchester, Leeds and Birmingham are also having a tough time. Yes, the market is a lot slower and our latest quarterly figures will show that the office take-up has been pretty weak, but some occupiers appreciate that they can get pretty good deals they have not been able to get for a number of years."
Stott points out that, on the Edinburgh office development pipeline, the tap has been turned off.
He says: "After the end of this year there will be no more developments completed because in the current economic climate developers are having difficulty in raising funding.
"Any occupiers considering moving – and there are some companies expanding with positive stories to tell – will find a limited number of options as regards grade A space in the city centre.
"This is what has happened in Edinburgh before – it is feast or famine.
"It is a tough market out there but there are good deals to be had by tenants. Landlords will come up with cash towards fit-outs – we are encouraging them to be much more flexible in their approach to occupiers."
Stott says the city is waiting to find out the impact of the Royal Bank of Scotland/HBOS situation.
"It is casting a cloud over the city but there are other financial institutions and other businesses who are proving to be robust," he says.
Stott will chair one of the conference seminars, which the programme states will be a look at "Edinburgh, city on the move".
It says the city's status within the financial sector has been rocked by the impact of the credit crisis on its major institutions – and there will be a discussion on how Edinburgh is meeting the challenges of the 21st century.
Scottish Enterprise snaps up vacant siteAS FORESHADOWED in this column last week, Scottish Enterprise (SE) has added to its landholding at the Glasgow International Financial Services District at Broomielaw, with the purchase of a vacant 1.8 acre site from Gladedale Capital. The price was not disclosed but it is believed to be in the region of £6 million. The land has planning consent for office development, and Stephen Gallagher, managing director, commercial, at SE, says significant interest is now expected from potential development partners. Colliers and Burness represented SE.
BNP Paribas Securities Services has taken more space in the Aurora building in Bothwell Street, Glasgow, in a deal put together by Atisreal. It has agreed with Davis Langdon on a sub-lease of 8,039sq ft on the seventh floor at a rent of £27.50 per sq ft. The European banking and financial group already occupies the second floor and this latest acquisition takes its total occupation in the building to 27,338sq ft.
AN INNOVATIVE deal structure has enabled the 19-bedroom White Hart Hotel in Campbeltown to change hands. Local entrepreneur David Eaton has taken from Oxford Hotels a lease on the hotel and he will run it with a view to completing the two-part deal in about two years' time by buying the hotel. Adam Lansdown, from the Glasgow office of Colliers Robert Barry, who put the deal together, explained: "There is a reluctance from conventional lending resources to support existing tradesmen and entrepreneurs and the deal has been done in the expectation that the difficulties will free up in the coming years."
GRANGEMOUTH-BASED commercial property company Bellair (Scotland) has bought the Inner City Trading Estate in Kyle Street, Glasgow, for £2.8m. The multi-tenanted estate has nine units, mainly light industrial, and was sold by the Royal London Mutual Insurance Society. Jones Lang LaSalle acted for Bellair, who received legal advice from Edinburgh commercial lawyers Davidson Chalmers, with Shepherd & Wedderburn advising the vendor.
KING Sturge has wrapped up two deals on behalf of Personnel Hygiene Services (PHS) in Livingston and Glasgow. In Livingston's Brucefield Industrial Park (James Barr advising the landlord, the Brucefield Estate Trustee Company), PHS has taken a 6,212sq ft unit at an annual rental of £28,000 (£4.50 per sq ft). And in Glasgow the lease is for a 7,023sq ft at Anniesland Industrial Estate, also on an annual rental of £28,000, with the landlord, Newstead Property Investment, self-represented
• Send deals details to jimdow@lumison.co.uk
