Yesterday’s rejection of independence by Scottish voters is likely to trigger a surge in commercial development and investment, some experts are claiming.
Last week, it emerged that property investors were inserting “exit clauses”into deals in case the country voted for independence. Developer Land Securities was considering pulling out of its extension of Glasgow’s Buchanan Galleries shopping centre and one of Scotland’s most senior property advisers claimed that for the last three months it “feels like we have been driving with a handbrake on”.
This morning, David Davidson, the Scotland managing director at Cushman & Wakefield, felt sure “there will be a surge in investment market activity when the handbrake is released”.
The Scottish market will “start to benefit more from the general economic recovery that has driven commercial property pricing so aggressively in Manchester and Birmingham and the other key UK regional centres”, he said.
Davidson said his firm knew of “a number of major European investors”who had been “waiting patiently for a ‘No’ vote”.
For David Melhuish, director of the Scottish Property Federation, it is “important that political certainty is now regained if market confidence is to be secured in the commercial property sector”.
It was vital, he added, that:“Certainty on the content and substance of the UK political parties’proposals to enhance the powers of Holyrood and a commitment by the Scottish Government to work constructively with this process is vital if we are to ensure normal business and investment activity in the wake of the uncertainties expressed during the referendum campaign.”
Not only will the “No”vote trigger a return of investment, but many expect prime property and Grade A office values to climb by at least three per cent by the end of the year —and by a further three to five per cent in 2015.
As head of estate agent Knight Frank in Scotland, Ran Morgan, said: “We expect we will be very busy in the coming months as vendors and buyers, many of whom have put off making a decision to buy or selling commercial property in Scotland due to the referendum, return to the market. This will lead to an increase in the number of transactions at all levels of the market.”
Kevin Bradley from planning consultancy Aecom was also sure there would be a considerable increase in Government investment in Scottish infrastructure and construction activity, as pre-referendum promises were kept.
“The Government is committed to investment in public infrastructure to secure long-term economic growth, so we would anticipate an announcement of this pipeline in the autumn,”he said. “This could result in additional funding for public sector infrastructure investment as well as potentially tax-advantageous conditions to attract foreign direct investment and for private sector businesses to locate in Scotland.”
