Office sector:
The office market within Edinburgh remained steady in Q1 2025 with approximately 140,000 Sqft transacting, in line with the average of the past 5 years. None of these deals however were above 10,000 sqft and there has certainly been a notable shift with occupiers seeking high quality best in class space over cheaper and slightly more dated albeit good quality alternatives. There is a distinct lack of prime stock available and with few developments in the pipeline the city office market will continue to remain constrained.
Industrial Sector:
The industrial sector has remained robust within Edinburgh and the Lothians with continued rental growth. Rents appear to be now generally accepted as being between £10-£12/sqft within the mid box range and smaller multi let estates seeking upwards of £14/sqft. Most notably at Capital Park where rents have been achieved in excess of £15 / sqft for brand new accommodation. We have also seen £20/ sqft being hit within city centre locations and the further development/refurbishment at Mandale Park (Russell Road) also looking to command the same rent.
Generally, this has been driven by increased construction, inflation costs for developers with the above rents needing to be achieved to make new developments stack up. That coupled with a lack of supply has propelled rents on since Covid. There is however further development at EGI approach which could offer up to a further 693,000 sqft of industrial space within the heart of Newbridge with various options available from 2,500 sqft up to 350,000 sqft which will certainly help ease supply issues.
Retail Sector:
The retail sector within Edinburgh has remained resilient amid all the economic challenges, with George Street and the St James Quarter continuing to attract large national retailers. Princes Street however has gone through a decline with more tourist orientated shops in place of previous large retailers/ department stores albeit proposals are underway to revitalise this into a more vibrant mixed-use destination.
Whilst there is continued economic uncertainty ahead, projections that interest rates will continue to trend downwards should impact positively on the markets for the year ahead for both investors and occupiers alike.
