Edinburgh’s prime office market is heating up, with rents hitting their highest point in almost a decade.

The main driver behind this surge is the “flight to quality” – businesses are ditching the old, tired office spaces and opting for swanky, modern digs in prime locations. Since the pandemic, companies are looking for spaces that offer a good work-life balance, excellent amenities, and easy access to public transport.

This shift in demand has created a serious shortage of top-notch office space in Edinburgh, driving up prices significantly.

According to Knight Frank, a leading commercial property consultancy, prime office rents in Edinburgh’s city centre shot up by 8% in 2023, hitting £43 per square foot. This is the biggest jump since 2015 and outpaces the average annual increase of 5% seen since 2014.

The report also revealed that since the end of 2019, prime rents in Edinburgh have climbed by more than 20%, a clear indication of the strong demand.

A Shortage of Space

The scarcity of prime office space is a key factor in this price surge. There’s a real lack of available space, especially for smaller suites under 5,000 sq ft. This is pushing up prices even for older, less desirable office buildings.

Looking Ahead

Knight Frank expects rents to continue climbing in 2024. The firm is predicting further growth in the market, fueled by the ongoing demand for high-quality office spaces.

Key Takeaways:

• Prime office rents in Edinburgh have jumped by 8% in 2023, the highest increase since 2015.
• This growth is fuelled by a “flight to quality”, with companies seeking out modern, well-located offices.
• The limited supply of high-quality office space in Edinburgh is driving up prices further.
• Knight Frank predicts continued growth in the market in 2024.