Still building ships

As the long term transformation of the River Clyde proceeds, there is still a reminder of its great history as the world’s shipbuilding centre with three Type 45 destroyers being fitted out and a section of the new Queen Elizabeth aircraft carrier sitting on a barge.

In contrast, the new Clyde riverside is being built around the shipyard with the Riverside Museum, BBC centre, hotels, shops, houses and offices. Eleanor McAllister of Clydebank Re-built said: “It is important to have a long term plan for the Clyde corridor of at least 20-25 years. There are problems to overcome such as contamination from the shipbuilding but we are stitching the Clyde into the city centre.”

Although cuts in government spending are on the cards, McAllister wants “everybody to hold their nerve and continue with regeneration.” That particularly applies to Clydebank which has the “benefit of a good board and local partners,” she added. Mark Barton of Clyde Waterfront points out that the regeneration of the Clyde is one “of the largest in the UK with 68 projects under construction, including the massive NHS Southern General Campus costing £842 million as well as two other hospitals.”

The breadth of the plans is considerable and includes the Scottish Hydro Arena concert venue which will open in 2013. The expectation is that this will have a similar impact to the O2 in London. David Rooney of Glasgow Regeneration Agency said: “We have introduced residential accommodation to the banks of the Clyde and built two new bridges which have opened up the southern side of the city. This means the area has been linked to the International Financial Services District, opening up areas for further development and providing access to jobs.”

Rob Pryce, also of Glasgow Regeneration Agency, added that “it is important to bring the local population and businesses into the process of regeneration so that they stay in the area and grow their activities.” This is also helping the expansion of tourism “where the Glasgow brand has changed in the past few years to that of a business centre.”

It is worth remembering that Glasgow has a number of world class museums and art galleries, including the new Riverside Museum on the Clyde designed by Zaha Hadid. This houses Glasgow’s transport collection.

Selling regeneration The extensive waterfront regeneration in Glasgow and other Scottish cities is the main reason why it will host the 8th WaterfrontExpo in November.“This shows our commitment to regeneration in the cities,” said Derek McCrindle of Scottish Enterprise,” and we have a suitable location for it at the Crown Plaza Hotel, SECC Glasgow.” It will be held on the 2nd and 3rd of November. The event will break new ground by concentrating on the actual experience and progress of seven major cities in turning their waterfront regeneration plans into reality - and the new investment opportunities this has created. McCrindle said: “The conference will address the shortcomings of how master plans and economic aspirations have turned out in practice by offering a combination of speakers and guided tours of the Glasgow and Edinburgh waterfronts as well as city workshops.”

New business park Regeneration, together with the extension of the M74, has brought immediate rewards with two UK development companies planning to invest £14 million in the Clyde Gateway East Business Park. Scot Sheridan will develop industrial space of 5,340 sq.metres while MEPC, in its first major scheme in Scotland outside Hillington, will build 13,006 sq.metres. The site has been undeveloped for 40 years and the two schemes will support 700 jobs. Clyde Gateway East is a new business park of 12 hectares with a capacity for industrial space of 37,160 sq.metres.

MEPC’s Rick de Blaby commented: “It is an important strategic acquisition for us, where we hope to replicate and deliver a modern Hillington Park. The infrastructure that Clyde Gateway has committed to this area of Glasgow is enormous and we are happy to invest alongside that.” Another new scheme in the Clyde Gateway area is the £38 million headquarters for the Strathclyde Police, less than one mile from the site of the Commonwealth Games.

CLICK HERE TO VIEW COMMERCIAL PROPERTIES IN THE SCOTLAND AREA.

Selling shops

One of the odd things about the commercial property market this year has been the buoyancy of the investment market for shopping centres and retail parks. The oddity is because the retail sector has been having a hard time. At the front of the queue to buy has been LaSalle Investment Management which has now paid £4.85 million for the 11,148 sq.metres (120,000 sq.ft.) Artizan Shopping Centre, Dumbarton, on behalf of pension clients, from Ireland’s National Asset Management Agency. This gives a yield of 13.6%, but the centre is 54% vacant by leasing area.

LaSalle said it would invest substantially to reinvigorate the centre to raise the standard for consumers. This is the seventh shopping centre purchased by LaSalle since 2009. LaSalle’s Andrew Bull commented: “This purchase demonstrates that value within the secondary market is beginning to come through and we have put together a solid business model to take the asset forward.”

In another retail transaction, Morgarth Group, through Colliers International and Morton Fraser, has paid £12 million for St Catherine’s Retail Park (South), Perth on behalf of an overseas investor. The yield of 6.82% reflects that it has strong medium term growth potential and a good range of retailers including Wickes, Pets at Home and JJB Sports.

CLICK HERE TO VIEW COMMERCIAL PROPERTIES IN THE SCOTLAND AREA.

Inverness performs

Inverness, and the area around it, has been an active market in the past year. The latest office deal, the largest in Inverness this year is the 465 sq.m. let in Oykel House, Cradlehall Business Park to the telecommunications company Highnet. Sandy Rennie of agent J&E Shepherd said: “As the largest office transaction in Inverness so far this year, the deal confirms the buoyancy of demand in the competitive market.” J&E Shepherd also acted for Mapeley in the sale of the 427 sq.m. Phoenix House, an office building at Wards Road, Elgin. It is 75% let to government agencies.

CLICK HERE TO VIEW COMMERCIAL PROPERTIES IN THE SCOTLAND AREA.

Anchoring Maxim

The financial restructuring of Maxim Office Park, Lanarkshire has brought a swift success with the anchor letting to the Scottish Environment Protection Agency (SEPA). It has leased 5,574 sq.metres (60,000 sq.ft.) in the Maxim 6 building, which allows the agency to bring staff under one roof and provide a laboratory to complement the one it has in Aberdeen.

David Gebbie of Arisaig Property Partners who are the new asset managers of Maxim said the financial changes allowed “both parties to achieve a leasing deal that previously couldn’t have been achieved.”

The importance of the new facility was emphasised by Scotland’s Environment Secretary, Richard Lochhead, who said: “The move will help develop closer working between partners within Scotland’s public sector. The new facility will house another first class laboratory and achieve excellent standards of energy efficiency and environmental performance.”

CLICK HERE TO VIEW COMMERCIAL PROPERTIES IN THE SCOTLAND AREA.

Mixing Business and nature

Hillington Park has become the first estate of its kind to be awarded a Biodiversity Benchmark by the Wildlife Trusts. This is an accolade for MEPC, the majority landlord at the 75 year old estate on the Glasgow and Renfrewshire boundary, because it has pursued a policy of environmental improvements which recognised the potential for encouraging wildlife to thrive in the park. Peter Dorans of the Wildlife Trust said: “Only a handful of organisations have achieved the standard of site management which meets the requirements of the Biodiversity Benchmark.”

There are small green sites dotted throughout the park, which have been used to support various wildlife activities, including a wetland and protective nesting boxes for small birds. MEPC’s Grant Edmondson said: “This is a tremendous endorsement of the work which has been led by our marketing and customer manager, Alison Clark.“ Clark added that, “we have been working on this project since 2008.”

At the Pegasus Business Park, Hillington, St Modwen has let 2,044 sq.metres (22,000 sq.ft.), most of which was to the furniture retailer Morale Furnishings. St Modwen’s Michael Hosie said: “There is great potential for further development here and the opening of the M74 extension has increased the site’s appeal.”

CLICK HERE TO VIEW COMMERCIAL PROPERTIES IN THE SCOTLAND AREA.

Swinging Edinburgh's way

The swing of the pendulum between the Scottish cities appears to have moved favourably for Edinburgh but less so for Glasgow while Aberdeen powers ahead on the crest of an oil wave. Even so, the level of activity remains weakened by the recession that started in 2007 and has hit confidence hard throughout the UK.

That is only part of the picture. The other is of a more resilient industrial sector and the impact of such improvements as the regeneration of the Clyde and the new M74 link.

According to the Registers of Scotland, commercial property transactions are down to the level of 2007 with a total of £890 million in the first half, which is £200 million below January-June 2010. David Melhuish of the Scottish Property Federation said: “Generally the market is bumping along the bottom.” As far as investment is concerned, in the first half it totalled £165 million, down from £180 million in the preceding six months. Half of this was accounted for by Glasgow and Edinburgh.

Campbell Docherty of CB Richard Ellis said: “There is still good demand from UK institutions and significant interest from overseas investors, specifically German open ended funds, in the prime regional office market although a severe lack of investment products and a shortage of development pipeline is hampering deal volume.” The CBRE report on the market highlights the stronger performance of industrial property compared with offices so far this year. Ryden’s Alan Gilkison said: ”The mid sized market, up to 3,716 sq.metres (40,000 sq.ft.), has been quiet while the smaller sector as well as larger sheds has improved.”

He noted that there had been a shift in demand for space from distribution to manufacturing. “The level of requirements is encouraging and we expect deals in the larger space to improve in the next few months.” What is clear from Gilkison and other property professionals in Glasgow is that the new M74 extension, which completes the ring road, is having a significant impact on business including opening up brownfield sites for development.

CLICK HERE TO VIEW COMMERCIAL PROPERTIES IN THE SCOTLAND AREA.

Canadians to the rescue

A Canadian company has stepped in to develop the £300 million Caltongate scheme and provide a boost to the market in Scotland’s capital city.

Prism Developments is discussing taking it over from Deloitte, the Administrator, and the Bank of Scotland. The site is located in the Old Town and was the subject of a mixed use scheme by Mountgrange.

The plan was for offices of 17,187 sq.metres (185,000 sq.ft.), 200 flats and a Sofitel Hotel which encountered considerable local opposition. Prism is not the first developer interested in the scheme because Deloitte has talked to a number of companies including Allied London and British Land.

One major scheme which is going ahead in the Old Town is the £45 million development on the Royal Mile of a hotel and mixed use project in the Castlehill area by the Chris Stewart Group.The hotel will be operated by Motel One which has 32 hotels in Germany and one in Austria and will be housed in the former buildings of Edinburgh City Council Development Department on Market Street.

In addition there will be residential space including self catering apartments, six offices totalling 5,574 sq.metres (60,000 sq.ft.) and two restaurants. The site stretches from Market Street towards Advocates Close and will take three years to complete. Chris Stewart said: “Although this site was challenging for us due to its sensitive nature and historic context, we were sure it could provide Motel One with everything they were looking for. I hope that Market Street is the first of many projects which we do with Motel One.”

As far as the office market is concerned, the first quarter saw a fall from the level of September- December 2010. Even so, it was a healthy 13,935 sq.metres

(150,000 sq.ft.) in 39 deals.

Small is beautiful

Apart from a shortage of prime offices, industrial property is also under increasing pressure because of a lack of new speculative schemes. The most acute problems are in the smaller and medium sized units because the big shed market is now quiet. “Demand in the smaller end is there but there is a requirement for more units up to 2,787 sq.metres (30,000 sq.ft.),“ said Alan Gilkison of Ryden.

One of the problems is the difficulty of prising funding out of banks, he added, noting the fact that demand from manufacturing companies has become more prevalent. Gilkison quoted the example of two engineering companies who have brought production back from the Far East to Glasgow because of the need to improve quality.

One scheme that caters for current demand is at Clyde Gateway East, a development of three units totalling 5,620 sq.metres (60,500 sq.ft.) At Bathgate, J Smart has bought a 6.05 acre site close to Junction 3A of the M8 motorway from Scottish Enterprise to build 4,665 sq.metres (50,218 sq.ft.) of distribution, business and warehouse space.

Bryce Stewart of Colliers International, joint letting agent with Ryden, said: “There is increasing activity in the smaller sized market, with the industrial sector currently more robust thanothers.” One manufacturing company expanding in Scotland is Rearo Laminates which has opened a new 1,022 sq.metres (11,000 sq.ft.) plant in Govan. In addition it has opened a new depot on the Longman Industrial Estate, Inverness, complementing existing outlets at Rosyth, Glasgow and Tyne & Wear.

Rearo’s Graham Mercer said: “In addition to the Inverness depot, an opportunity arose to expand our manufacturing business within Glasgow and the property at Drumoyne Road will allow us to do this fairly readily with little or no disruption to our production lines and, as importantly, our staff.”

Attractive Aberdeen

An example of the attractions of Aberdeen is that, for its first investment in Scotland, Arium, the fund manager, is poised to buy the recently completed 11,613sq.metres (125,000 sq.ft.) IQ building on Justice Mill Lane, which brought a yield of 6.5%.

The attraction is that the property was quickly let to two energy companies, Centrica and Wood Group. It underlines the status of Aberdeen as a top regional city since there is so little empty space available. Another significant transaction is the sale of the 9,290 sq.metres (100,000 sq.ft.) former warehouse of Diamond Envelopes at Dyce (now occupied by oil and gas supplier Petrowell) for £6.7 million to Highcross. The yield is 9%.

Chris Grinyer of J&E Shepherd, who acted for Diamond, said: “The sizeable sale is one of the largest industrial buildings sold in Aberdeen in recent years.”

Minting it at Minto

The pace of new development in Aberdeen has been maintained and has generally surpassed other parts of Scotland.

For example, Knight Property Group has now completed the second phase of the 11 acre Minto Commercial Park, Altens scheme and will move onto the final phase on Site 6. So far, Knight has invested £20 million over a three year period in Minto. Knight’s Howard Crawshaw said: “Being involved in a regeneration project such as this has been extremely satisfying.”

Elsewhere at Minto, Brinker Technology (represented by J&E Sheppard) has leased the 1,115 sq.metres (12,000 sq.ft.) Renewable Energy Centre, a warehouse and office property. Graham & Sibbald acted for the landlord.

Also being developed is Stockland Muir’s Aberdeen Gateway Business Park as part of a 45 acre mixed use scheme of industrial units and offices. Stockland Muir commented: “We will capitalise on a strong occupational market and an apparent shortage of good quality industrial stock. As the oil price has risen above $100 a barrel our marketing agents have experienced a significant increase in enquiries for properties in the 929-1,394 sq.metres (10,000-15,000 sq.ft.) range.

The geographical spread of developments around Aberdeen is impressive with a speculative scheme for houses, a waste recycling centre, technology units and business centre at Alford, a village outside the city. Also, ten miles from the city centre, two new detached office pavilions have been completed on the Kingseat Business Park and are being marketed through Knight Frank and DM Hall.

Sparkle in the Highlands

Although it appears to be far north in the Highlands, Inverness has recently had a sparkling commercial property market. The most significant transaction is Roxhill Developments starting on a seven year plan with Inverness Airport Business Park to develop 37,160 sq.metres (400,000 sq.ft.) at the airport. Roxhill’s David Keir said: “This is one of our most significant investments to date. Inverness is a fast growing city, yet it has a real shortage of industrial space.”

According to agent Graham & Sibbald, it has had 14 transactions in the past two months “which is an encouraging sign of increased activity throughout the Highlands and Islands.” These deals included six industrial units ranging from 12,995 sq.metres (139,880 sq.ft.) to a small unit as well as city centre office investments in Inverness, Lochalsh and South Uist. In Skye and Lochalsh demand for industrial units exceeds supply, the agent said.

Positive monitor

While the recovery in the UK economy may be creaking, the outlook for property appears to be improving.

The latest ICAEW/Grant Thornton confidence monitor found that in the second quarter 57% of professionals in the property sector are more confident about economic prospects for the next 12 months compared with the past year. Only 12% are less confident. Interestingly, the monitor records that the drivers of increased business confidence are manufacturing and property. Specifically on property, the confidence index was 24.5 points compared with only 2.9 points in the first quarter of 2011. Clare Hartnell of Grant Thornton said: “The days of pre-recession growth may now be in the past, but the rise in confidence points to the sector taking assertive steps to a more prosperous era.”

These general findings are broadly experienced in Scotland where Aberdeen continues to perform strongly while both Edinburgh and Glasgow are coming up against a shortage of Grade A office space which is limiting choice and will act on take up. The shortage also extends to industrial property, notably at the smaller end where there remains an appetite for buying freeholds.

But there are plenty of positive events throughout the country, such as the refinancing of Maxim Office Park, a major Canadian investment in Edinburgh and new schemes in Inverness.

According to Knight Frank, high oil prices drove the Aberdeen office market in 2010 with an increase of a third to 32,329 sq.metres (348,400 sq.ft.) take up. This trend has continued into 2011 with take up already matching the whole of last year. Rents are the highest of any UK regional city at £333.56 a sq.metre (£31 a sq.ft.) paid by Centrica at IQ and incentives are also considerably below those prevailing in the rest of the country.

Knight Frank’s Katherine Monro said: “With oil prices well in excess of $100 a barrel, activity is expected to remain healthy in 2011.” achieved before then because Pace is apparently negotiating for floor by floor lettings. In any case there are potential occupiers seeking new space, such as the law firm Mills & Reeve.

Mastering the motorway

Looking ahead beyond the tough economic conditions, East Renfrewshire Council, Scottish Enterprise and Patterton SPV (in Administration) has appointed Jones Lang LaSalle (JLL) to prepare a master plan and economic assessment for development sites along the M77 corridor. JLL said it is designed to challenge future land use assumptions and identify options that will help long term sustainable economic growth in East Renfrewshire and the city region. Craig Wallace of JLL said: “The study will seek to identify short, medium and long term actions, as well as considering deliverability from a planning, technical and market perspective.”

Miller Developments is certainly taking the long view and is backing this up by buying sites. It has bought the 120 acre former home of the Hillman Imp car at Linwood from the Receivers of Mountgrange. The site has planning permission for a mixed use scheme but Miller is now discussing prospective schemes with the local authority.

One long term problem increasingly rearing its head is the shortage of Grade A office space throughout the UK. Mike Buchan of JLL said: “In contrast, Grade B office space carries significantly more downside risk for landlords and, while we have seen many significant releases of this type of office space by occupiers, we expect its level to remain inflated. “

Clearly the logic of the market is that more Grade B space will be refurbished or converted, some to residential use. Interestingly, some commercial values are being cut in central Glasgow, as witness two potential restaurant/retail sites in Mitchell Street, close to the top shopping venues of Buchanan and Argyle Streets.

Mark Broderick of James Barr said: “The market has quietened down compared with 2010 and is subdued with deals taking longer to complete. This is a good time for potential occupiers, but they are putting off moving.” One property that has come onto the market is the 4,162 sq.metres (44,800 sq.ft.) former Virgin Media call centre at 60 Maxwell Street, a stand alone property on a landscaped site. It can be leased or purchased through JLL.

Barclays financial hub increase commercial property marketing in Glasgow

Glasgow has been one of the success stories among regional cities in the past decade and continues to attract blue chip companies. Top of the list is Barclays and its creation of a global hub at the International Financial Services District for its Barclays Wealth and Barclays Capital, which will bring 600 new jobs.

The relocation has been helped by a government grant of £6.6 million under the Regional Selective Assistance programme. Gordon Matheson, leader of Glasgow City Council, said that Barclays’ decision to expand substantially its presence “is testament to the availability and quality of the people it has employed here over a number of years. It also underlines the city’s status as a major UK centre for financial services and shows how successfully Glasgow can compete for blue chip inward investment.”In fact, take up this year has been quiet with the third quarter at 12,816 sq.metres (137,960 sq.ft.) for Greater Glasgow with the majority of deals relatively small. But the final quarter will be different, said Mike Buchan of Jones Lang LaSalle. “We anticipate a strong final quarter with the city centre being in line with the 5 year average.”

An example of the strength of Glasgow is that Scottish & Southern Energy stepped in to buy the 5,574 sq.metres (60,000 sq.ft.) 1 Waterloo Street from the developer Stockland for £25 million at a time when the law firm Shepherd Wedderburn was on the point of leasing office space there. It now has to look elsewhere.

This is the second time in the year that an occupier has been forced out of a building it was negotiating to lease because of a sale. In the former case the National Farmers’ Union bought Clarion for its own occupation despite a large part of it being under offer of Maclay Murray Spens, the law firm.

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.

Edinburgh’s Commercial Property Mood Swings to the Positive

The mood in Edinburgh is lightening as the office market eases itself out of the recession. “The first quarter was better than anticipated,” said Craig Watson of Jones Lang LaSalle, ”which was helped by a couple of substantial deals, 5,111 sq.metres (55,000 sq.ft.) to the Scottish Qualification Authority band 3,715 sq.metres (39,984 sq.ft.) to NHS West Lothian.” Broadly speaking, the demand is for smaller units but Watson said “the encouraging change is that we are seeing enquiries for larger units. There is also a broader range of companies, from IT to financial services, seeking space.” Looking ahead the market will become increasingly dominated by the fact that there are no new offices under construction and none are likely to be completed until at least 2013.”That means a move towards a stronger landlord position away from the dominance of tenants,” Watson added.

From that will follow a decline in the incentive packages which Watson noted will come back later in the year and have probably reached their peak now. Stewart Taylor of CB Richard Ellis is encouraged by the shorter time scale on deals and a growing awareness that new space will not come through for some years. “There has been increased demand for flexible space, such as at Heriot Watt Research Park.” “Confidence has increased in the financial and banking sector,” added Taylor,”and with the prospect of a shortage of prime space they are holding onto offices.” What is interesting is that the dire predictions on the fall-out from the problems of the HBOS and the Royal Bank of Scotland have failed to materialise, adding further to the improved mood.

Equally as encouraging is that occupancy at Edinburgh Park has increased and is now up to 92%, said New Edinburgh Limited (NEL). The latest letting is to the technology company Agilent which has taken on enough space for an additional 200 staff. NEL’s Pamela Grant commented: “Edinburgh Park has reached another exciting stage and this surge in occupier activity is testament to its success. There continues to be a strong interest from new occupiers.”

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.

Pioneering Commercial Property in Leith

The pioneering Tax Incremental Finance (TIF), which will make its debut in the UK as part of the funding for a £700 million regeneration of the waterfront at Leith, Edinburgh’s port, could be the answer to stalled revitalisation plans in other parts of the country. The Scottish government has given the go ahead (and is considering similar schemes in Glasgow and North Lanarkshire) and will contribute £84 million to the overall cost to finance key infrastructure investment against future increases in business rates income.

The concept is that regeneration and all that goes with it will attract more businesses to the area, thus increasing tax revenues. John Handley of planning consultants DPP said: “TIF schemes are much easier to get off the ground in Scotland following the devolved tax raising powers of the Scottish Parliament. There would need to be a change in primary legislation for such schemes to work in England and Wales to allow local authorities to direct tax revenues in this way.” Meanwhile, there has been an improvement in the office take up in the third quarter in Edinburgh, reports Jones Lang LaSalle, with a 30% rise over the previous three months to 15,793 sq.metres. Although the level of enquiries declined compared with March-June, this may be due to uncertainty over the government’s spending cuts. The supply situation is easing after peaking at the end of 2009 and will continue to do so because of a lack of new development (as in the rest of the UK). An important deal was the letting at Waverley Gate which has remained stubbornly empty for years.

The outlook has been enhanced by the expansion of Tesco and Virgin’s financial operations who are both seeking office space. Tesco has short listed six properties for a 3,716 sq.metres requirement. It needs to move in early 2011. Virgin is seeking a smaller space, though that would be considerably larger than its initial office at Venue Studios.

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.

Scottish Commercial Property News in Brief 3

The long established Bowfield Hotel and Country Club is on the market through Graham & Sibbald for £2.75 million.
The leisure complex has 23 bedrooms and is set in 15 acres. It has a full range of facilities, such as a swimming
pool, squash court and art leisure complex and is only 17 miles from Glasgow city centre.


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.

Developers Choose Residential

While the recession has hit office development hard in Edinburgh with only one scheme under construction, the residential side is more robust with the Drivers Jonas Crane Survey reporting 16 new schemes being built. There is only one commercial scheme due for completion in 2011, the 5,106 sq.metres building on the Shawfair Business Park which is pre let to the Scottish Qualifications Authority. Drivers Jonas reports that the large amount of space that came onto the market in 2009 is being whittled down so that the vacancy rate is now 7%. So clearly there is a shortage of Grade A space looming in 2011 and 2012.

The public sector has played a large part in the new lettings this year. As is to be expected in such a situation, tenants are in control so that landlords have to fight for deals, hence a 10% decline in prime rents to £279.76 a sq.metre. The worst could be over with Drivers Jonas forecasting stable rents and a decline in incentives in 2011. One thriving sector is student accommodation where developers and investors are particularly active at the moment. Drivers Jonas commented: “With a large student population and increasing international student population, demand in the city remains strong.”

At least there has been more activity in the business parks with the Royal Society for the Protection of Birds (RSPB) relocating to Edinburgh Park at 2 Lochside View. Duncan Orr Ewing of RSPB said: “As a conservation charity concerned about climate change, we have targets for reducing our carbon emissions and a more efficient office will help us in part of these efforts.”

Most of the deals in Edinburgh have been small, although Edinburgh Technopole continues to attract new tenants. The latest is Lead Generator whose Ian Murphy said: “Dealing with clients such as KPMG and Genesis Scientific was the driving force behind our move to the Technopole as Bush House provides the state of the art technology required to fulfil my clients’ day to day demands.”


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.

Scottish Commercial Property News in Brief 2

In the 100,000 sq.ft. plus “Big Shed” end of the market, whilst many occupiers defer making decisions about relocating
or expanding, we are seeing signs of activity from Third Party Logistics firms (3PLs) as new contracts are being tendered. Interest is also coming from companies seeking to consolidate various sites under one roof to facilitate cost savings, with some looking to take advantage of lease expiries and breaks.


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.

Foreigners are Buying

What is interesting about the investment market in Glasgow is the extent of foreign buying as illustrated by two recent deals. The German fund, Union Investments, has bought the 6,305 sq.metres (67,874 sq.ft.) Equinox building for its Unilmmo Deutschland fund for an estimated £28.3 million. Another German fund, SEB Europe REI, has bought an 8,952 sq.metres (96,366 sq.ft.) property in St Vincent Street from the Scarborough Group for an undisclosed price. The property is leased to the Bank of Scotland.

The other substantial deal in Glasgow saw a client of DTZ Investment Management, represented by Knight Frank, buy the 3,270 sq.metres (35,197 sq.ft.) 133-137 Buchanan Street for £21.2 million for a yield of 5.5%. The building has a mix of offices and shops. Tony Gibby of DTZ Investment Management commented: “We feel that Glasgow and Edinburgh are showing good value at present and with a further £600 million to spend across a number of clients, I expect there to be further acquisitions north of the border. We are still looking to acquire similar assets in Glasgow, Edinburgh and across the rest of the major cities in the UK.”


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.