Good start to year in office space market

THE office market in Edinburgh has made a positive start to 2008, despite the storm clouds gathering over the economy, according to a new report.

Property agents Cushman & Wakefield said take-up in the first three months of 2008 totalled over 200,000 sq ft, although there were no transactions over 20,000 sq ft. The report forecasts take-up for the year could reach 800,000 sq ft.

Angela Lowe, associate partner in the office agency department at C&W, said: "Improved demand has also been accompanied by reduction in supply.

"Vacancy rates have fallen by approximately two per cent 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.

Tenant activity in Quarter 1 included significant lettings to Microsoft, Murray Beith Murray, Jacobs Babtie and Lloyds.

Rents are also improving according to the report with headline levels now confirmed at £29 per sq ft compared to £27.50 per sq ft in the first quarter of 2007.