Capital office block attracts interest ahead of 2018 launch

● 2 Semple Street only speculative launch next year ● City is seeing record demand but shortage of supply

The only speculative office development in Edinburgh due to complete in 2018 is already attracting interest from potential occupiers nine months ahead of its planned completion.

Progress on site at the five - floor development at 2 Semple Street comes amid a “chronic” shortage of grade A office accommodation in the capital.

Letting agents handling the property, which will be able to accommodate up to 400 employees, are already speaking to a number of potential occupiers considering taking space from single floors up to the entire building.

G SS Developments, the Scottish company behind the building in the city’s Exchange District, said work on site is progressing ahead of a final completion date scheduled for July.

Other office projects which are about to start or are underway in Edinburgh are expected to have 2019 and 2020 completion dates but 2 Semp le Street will be the only speculative development to be ready for occupation in 2018.

Office space take-up in Edinburgh has hit a record high recently but availability of grade A accommodation is currently down more than 60 per cent compared to last year.

Angela Lowe, senior director at joint letting agent CBRE which is handling the building along with Cuthbert white, said :“The prospects for tenants seeking space over the next 24 months are not good, so it is encouraging that 2 Semp le Street will be ready and available in mid- 2018.”

Paul Stevenson, director of G SS Developments which operates from Aberdeen and Edinburgh and has a property portfolio of more than £ 70 million, said :“Other types of developments with less risk are being favoured by funders, which means speculative office projects in Edinburgh are few and far between. While supply of Grade A offices remains very tight, conversely there has never been more demand.”

Earlier this week a report by property investor M& G Real Estate said demand for office space in Scotland remains strong, with the shortage of high-grade stock set to support rental growth. It has recently invested in speculative developments at Quartermile Three in Edinburgh and 1 West Regent Street in Glasgow.

According to recent figures from Cushman & Wakefield the uptake of office space in Edinburgh reached an alltime high in the second quarter of this year, with more than 535,000 sq ft transacted during the quarter.