Office take-up in Edinburgh surged by more than 40 per cent in the first quarter of 2019, according to research by real estate firm Avison Young.
But with the availability of Grade A and B office stock in central Edinburgh estimated to be at a critical low at 496,000 sq ft, competition among occupiers could lead to further rent increases.
Avison Young director Peter Fraser said: "While the latest figures show this has been a strong quarter for Edinburgh, limited choice in the market remains a factor.
Edinburgh office rents and property value outperforming most of UK
“Occupiers should be aware of this, particularly when faced with lease expirations or break options. The decision-making process is taking longer, a factor that may be enhanced by Brexit.”
He said his firm was aware of more than 100 businesses facing lease expirations over the next 18 months who would need to consider their property needs.
The latest Avison Young figures show that total take-up across the Edinburgh region held at 206,000 sq ft, marking an increase of 38 per cent from the similar period in 2018.
The results show the strength of out of town markets where activity accounted for 53 per cent of total take-up - up 24 per cent from Q1 2017.
While growth in our of town markets is likely to be sustainable, the findings show that another 450,000 sq ft of leases are expected to expire in the city centre over the next 18 months.
Meanwhile figures for Q1 in Glasgow show that activity was below average, as city centre take up for the Qi totalled 91,663 sq ft.
Former bank main office on market as potential company HQ
Alison Taylor, managing director and prince for Avison Young, said that Glasgow had experienced an incredibly active 2018 with 1.4 million square feet city centre takeup across the year.
“Given this Q1 was likely to be low by comparison and there is still huge uncertainty in the business community surrounding Brexit.
“However our prediction for the remainder of 2019 is that take-up will be boosted by a number of significant large pre-letting inquiries considering a number of new build Grade A developments proposed in the city centre.”
