The Scottish capital Edinburgh could run out of available
high-quality office space to rent
within the next 18 months, according to a report by commercial
property consultants GVA.

GVA revealed there was very little new grade A commercial
property under construction within Edinburgh's city centre and
consequently demand will soon outstrip supply.

The lack of construction has been blamed on severe restrictions
on available finance for new-build premises, combined with a
distinct lack of confidence within the private sector.

Subsequently GVA argue the city requires "urgent development" of
grade A office space to sustain the high levels of activity in the
grade A office letting market within central Edinburgh in the last
year.

Toby Withall, national markets director for GVA Scotland, said:
"There is a common misperception in Edinburgh's office market that
the credit crunch and banking crisis led to the financial services
sector dumping operational office stock on the market.

"However, this is not the case and in fact the vast majority of
the main banks' operational stock remains occupied in both central
Edinburgh and out of town."

Mr Withall insisted there was minimal grade A accommodation
being built in Edinburgh's city centre, with just two sites in
Morrison Street currently under construction.

"Research suggests there are a healthy number of occupiers with
break options and leases that will expire in 2013-15," he said.

"If as expected, these companies choose to relocate, demand will
only increase, which in turn will have a positive impact on rental
values.

"The lack of suitable office accommodation could lead to upward
pressure on rental values by as much as 20% in the city."

Alternative options for businesses could be to consider
relocating over the border into the North
East and North West of England,
where thriving business locations are available to enhance any
business presence.

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