According to recent reports, Edinburgh could run low on Grade 'A' office spaces in the coming eighteen months. The growing demand for office spaces in Edinburgh could lead to dwindling supply at the upcoming city centre.
Owing to the numerous restrictions acting on the available finance, the supply of new office space construction projects is lowering. The lack of an active role played by the private sector is also contributing to the situation.
Insiders suggest that Edinburgh is currently in dire need of infrastructure development, especially the addition of grade 'A' offices. Central Edinburgh has reported high activity in the office space market in the last year and the rapidly increasing demand is not being met by new office spaces.
Office property experts believe that a common misconception in the office market of Edinburgh is that the banking crisis as well as the credit crunch is causing the financial sector to dump operational office stocks.
Contrary to the belief, most of the operational stocks of major banks are occupied within central Edinburgh and outside. Currently, the office construction scene in Edinburgh is significantly slow, with only two sites located on Morrison Street under construction at the city centre.
Research also suggests that there several occupiers of office spaces in Edinburgh whose leases are set to expire between 2013 and 2015. Upon expiration, if the companies decide to relocate, the demand for office space in Edinburgh will continue to rise and boost rental values.
The lack of office space could increase rental values by about 20% in the city centre if the situation is not corrected. This is a profitable opportunity for investors and developers to begin construction projects in Edinburgh.