Edinburgh worst hit city of 2008

James Buckley 06/04/2009 09:42

The outlook remains turbulent for office markets across the UK, but a floor in investment values should be seen by the end of this year, says Drivers Jonas’ latest UK Key Cities Research.

The report suggests that Edinburgh was the worst hit city last year with the largest yield shift of any of the key cities. A movement of 200 basis points was recorded during 2008 in the city, which is heavily reliant on financial occupiers.

Alasdair Ramsay, head of Drivers Jonas in Scotland, said: “We expect that in Edinburgh, occupiers will no longer be location driven and we will see a return to cost-sensitive, demand strategies. 

"Availability levels are currently at their lowest for five years; however the latest Crane Survey shows 600,000 sq ft of new stock will complete in Edinburgh during 2009. This will be the largest-ever amount of space to complete in one year in the city.

"While the impact of this new space will be tempered by the very low levels of availability, Edinburgh’s city centre does, to some extent, rely upon on the financial services sector and so demand is expected to be weak. 

"This could mean we will see a decline in demand for the city centre as the peripheral locations become cheaper and more cost effective – this is also where a third of the new space will be delivered."

james.buckley@rbi.co.uk

Office developments grind to halt in Edinburgh

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