‘Banking on a steady recovery’
West Edinburgh office market benefits from renewed confidence in the financial sector
If there’s one thing which came out of the most recent West Edinburgh office take up statistics, it’s that the financial sector, specifically banking, is driving the upsurge. Following the global financial crash in 2007, this is welcome news.
A report produced in January by property firm Jones Lang LaSalle showed that of the 254,000 sq ft of space acquired by occupiers during 2013 over 54% (138,000 sq ft) can be attributed to the banking sector alone. Deals involving Lloyds Banking Group and Sainsbury’s Bank amounted to 55,000 sq ft and 83,000 sq ft respectively.
These transactions put an altogether better perspective on the annual figures which still showed 158,000 sq ft of vacancy at Edinburgh Park and 190,000 sq ft at South Gyle. Though Edinburgh Park and South Gyle still offer a combined availability of 348,000 sq ft, these transactions contribute to the highest level of take up in West Edinburgh since 1999.
Until recently Lloyds held a 50% stake in the supermarket chain’s banking division. A £250 million deal was struck last May for it to sever ties with the state-owned bank, but the transaction only concluded at the end of January. This leaves Sainsbury’s with full autonomy to develop their business.
Sainsbury’s will shortly make its move to a four-storey headquarters building at Lochside Avenue, only a stone’s throw from its existing premises on the South Gyle Business Park. It’s a significant sign of intent to scale up from Sainsbury’s who, in 1997, were the first major British supermarket to open a bank.
Commenting shortly after the deal was announced Sainsbury’s Chief Executive, Peter Griffiths, said: “These are exciting times for the bank and the announcement that we are moving to new, bigger and better premises is just the latest development.
“We have been delivering strong, sustainable growth over the past few years, and as we enter a new phase in our history, it is appropriate that we have new offices that can support our growth plans.”
Their move is coming at the right time. According to Sainsbury’s research around 862,000 Scots are expected to take out a supermarket banking or insurance product this year; so there is plenty of business and market share to be won.
The bank is also planning to significantly grow its staff numbers from 350 to just under the 500 mark by the end of this year. It was reported by The Scotsman last month that these recruitment plans are being accelerated, with Sainsbury’s firmly focussed on entering the mortgage market where Edinburgh-based Tesco Bank has seen success.
It is hoped that securing this number of jobs and retaining such a well-known and respected supermarket brand in West Edinburgh, will provide a catalyst for others to follow suit.