The upcoming Scottish independence referendum has created waves throughout the business world, with the majority of polls showing that most businesses would be against Scotland voting Yes in September. In turn, this has created a great deal of uncertainty north of the border, with the No campaign pointing out that Scotland’s economy could struggle greatly if businesses chose to move their operations south – something which would have a heavy impact upon the independent country’s commercial property market.
Yet a new report by global commercial real estate services firm Colliers International indicates that, whatever the outcome, the referendum will create a boom in the Scottish commercial property market from September onwards. Coinciding with the traditionally busy end of the year, the firm believes the removal of the current market uncertainty will open the floodgates on pent up investment demand, with a Yes vote triggering large scale business expansion in the professional services sector in particular.
Head of retail for Scotland and head of Glasgow at Colliers International, Tom Johnson, believes a “win-win” situation lies ahead in terms of commercial property north of the border.
He says; “The reality of a Yes vote would, undoubtedly, lead to a new period of serious reflection.
“In that period, we are likely to see a surge in demand for professional services firms, both in Edinburgh and London, as companies seek advisory services.
“This is likely to be reflected in occupier market activity in Scotland, particularly in Edinburgh – the city is likely to see an upturn in professional services organisations, staffing up to supply advisory services to government and companies, and, in the event of a No vote, companies will be taking on new space as uncertainty is removed.”
In the short term, then, Scotland’s commercial property market is expected to benefit from a surge in activity either way. However, the survey also shows that a Yes vote could cause investment to suffer in the medium term, with 51 per cent of the 150 occupiers and property investors polled believing an independent Scotland would, for the next few years, prove to be a “riskier investment” than the Eurozone periphery.
Director of research and forecasting at Colliers International, Walter Boettcher, explains; “Based on the feedback of some 150 real estate professionals, it is clear that the lack of certainty is creating anxieties in this important part of the economy.
“While the Scottish Government’s Scotland’s Future proposal has suggested it will take a decidedly ambitious 18 months to put in place the necessary institutions, treaty revisions and a constitution, the survey suggests that confidence in the property sector is likely to take significantly longer to restore.
“Only 13 per cent of our respondents expect the current volatility and uncertainty to disappear within two years, given a Yes vote.”
With the countdown to the referendum very much on, businesses will no doubt be waiting anxiously for the outcome. Either way, Scotland must brace itself for a flurry of investment in the immediate aftermath – but if Colliers International proves to be correct, this could be the last boom in activity Scotland will experience for some time if a Yes vote is achieved.
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