Businesses are putting office moves on hold until coronavirus uncertainty has passed, according to property consultancy Knight Frank.
The agency's Edinburgh team predicted that firms are more likely to renegotiate existing leases this year rather than up sticks.
It revealed a total of 124,004 sq ft had been leased in the capital from January to March. Space leased in the city centre for that quarter was 68,915 sq ft, down more than 25% on the same period last year.
Knight Frank said there had been a 15% quarterly increase in the number of enquiries but that most had been put on hold.
Toby Withall, office agency partner at Knight Frank Edinburgh, said: “While the impact of the coronavirus pandemic will likely have a significant effect on office take-up throughout the remainder of 2020, there was a relatively steady level of activity in Q1. That said, Edinburgh city centre take-up was still lower than average, with the market still recovering from the protracted Brexit process.
“Amid the current backdrop, we’ve seen an ongoing trend for lease re-gears which we expect to continue during the months ahead. In a time of unprecedented challenges, we’re already witnessing a tendency for occupiers to stay put and extend contracts as they ride out the storm.
“It’s also encouraging to see that a large portion of live requirements have been paused, rather than shelved completely. Edinburgh is still supporting a busy financial services sector, along with growing tech companies and an active public sector. Activity may be on hold for the time being, but the opportunities have not been completely abandoned.”
