DEMAND for commercial property is exceeding supply in Edinburgh as the city outperforms everywhere else in the UK in terms of take-up.

New figures reveal the capital saw a 175 per cent increase in take-up over the five-year quarterly average, with a total of 432,350 sq ft. This was driven by the Government Property Unit’s agreement to let 189,000 sq ft at New Waverley and investment manager State Street’s decision to pre-let 65,600 sq ft at Quartermile 3.

In comparison to Edinburgh, activity in Glasgow was “subdued” with take-up in the city centre at 132,060 sq ft, according to real estate advisory business GVA. However with forthcoming deals in the offing, GVA is predicting that under-supply could soon be a problem here too.

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Out-of-town performance was up 52 per cent on the five-year quarterly average, from 90,400 sq ft to 137,040 sq. ft. This was partly due to Police Scotland letting 27,760 sq ft at Inchinnan Road, Paisley, in the quarter’s third-largest out-of-town deal in the UK.

Total take-up for the first half of 2017 in Edinburgh amounted to 626,575 sq ft with Glasgow on 235,280 sq ft.

Peter Fraser, director of business Space for GVA in the capital, said: “Edinburgh has had an exceptional quarter and has massively outperformed all other regions in the UK in terms of sq ft take-up. There have also been inward investment transactions among the large deals, with Australian financial services firm Computershare taking 41,000 sq ft of space at the newly-refurbished Edinburgh House in North St Andrew Street.

“The activity hasn’t just been restricted to the city centre, with an 82 per cent increase on the five-year average in out-of-town deals too.

“However, this record take-up has also compounded the fact that demand is outstripping supply. No new stock is coming through to replace let or pre-let space and there is now a significant shortage in Edinburgh and future development is also constrained.”

Alison Taylor, senior director of Business Space for GVA in Glasgow, said: “All eyes are on Q3 in Glasgow, with two 80,000 sq ft deals at Atlantic Quay under offer – the Scottish Courts Tribunal Service and the Department for Work and Pensions. We anticipate that demand will outstrip supply in Glasgow before the end of the year.”