Commercial Property Confidence Returns Slowly To Scotland

What is happening in Scotland is mirroring the rest of the UK with a recovery in lettings and investment sales but a growing shortage of Grade A offices in the major cities. Although improving, confidence is fragile. Even so, the market is improving and CB Richard Ellis reported “a marked increase (in take up) in the first half year. Glasgow performed well with a doubling of leasing to 28,037 sq.metres (301,800 sq.ft.) compared with the same period of 2009. Aberdeen and Edinburgh also saw “impressive increases.”

Also similar to the other major cities of the UK, the market is dominated by smaller deals and the lack of new development brought a reduction in the amount of space available. The CB Richard Ellis view is that it is set to continue “with few new developments in the pipeline. However, this undersupply may encourage developers to go into construction in the near future.” Rents have held up well and even increased in the oil city of Aberdeen. But overall performance in terms of capital growth and returns to investors declined in the second quarter of the year, although retailing was more resistant to the slow down. Industrial property also displayed some resilience with total returns of 2.8% and capital growth of 0.8% in April-June.

Aileen Knox of CBRE said: “Economic recovery appears to be at a slower pace in Scotland than the rest of the UK and this has affected the commercial property market. However the Bank of Scotland PMI survey points to an improvement in GDP growth in the second quarter of the year.” “This is important for Scotland as there was no growth in the first quarter and it is likely to feel the effects of ongoing austerity measures introduced by the new government due to a large number of public sector jobs.” On the other hand, the investment market is healthy enough (even though a bit down on the rest of the UK) with Property Data reporting transactions of £670 million (led by UK institutions) in January-June compared with £290 million in the same period of 2009.

The Scotland Commercial Property Register

The Scotland Commercial Property Register for Sctoland is a leading UK business property publication from Martin Austen Publishing. The aim of the publication is to offer a simple and effective means of finding Offices Space, Serviced Offices and Commercial Property in Scotland . You can also find the latest commercial property news for Scotland.