Scottish Commercial Market “Still Gathering Pace”

Posted on 13 June, 2014 by Cliff Goodwin

The momentum which lifted Scotland’s commercial property market throughout 2013 has continued gathering pace into the first quarter of this year, claims a new report.

Scottish-Commercial-Market-Still-Gathering-Pace

Investment across all commercial sectors for the first quarter of the year was 2.8 per cent, down slightly on the 3.3 per cent of 2013’s final quarter, but delivering an annual return to the end of March of 10 per cent — well ahead of the 0.2 per cent for the same point last year.

“This level of performance is consistent with wider signs of economic and occupier recovery that has been observed in Scottish commercial property since spring in 2013,” says the report by property consultants CBRE.

Relative to the UK as a whole, however, Scottish property continues to underperform, although the gap is beginning to close, particularly within the retail and industrial markets. The report claims that retail performance north of the border is currently the closest to UK rates of return, with an annual total end of March return of 8.6 per cent, just 1.4 per cent below the national return.

Scottish industrial property was once again the strongest performing sector in the first quarter, delivering a quarterly total return of 3.9 per cent, although down from the previous quarter’s 4.7 per cent. Compared to both offices and retail, industrial benefited from 0.3 per cent of rental value growth during the quarter, which assisted in pushing capital values up by 2.2 per cent.

“Little has changed in the relative performance between Scottish cities, with Aberdeen’s offices and industrials continuing to show the greatest performance,” said Aileen Knox, a senior CBRE director.

“Retail returns from Edinburgh, Glasgow and Aberdeen haven’t been as strong, but there is now a little more variation between these cities that was not as evident last year,” she added. “Edinburgh retail in particular, with an annual total return to March of 9.3 per cent, is now beginning to catch up with other sectors in Scotland.”

Commenting on the office market, Knox said Aberdeen was the top performer with annual total returns to the end of March pushing ahead of the 20 per cent mark and holding its own against comparable south of England markets such as Cambridge. Industrials in Aberdeen, at 18.8 per cent, are not far behind. The granite city’s nearest rival was Edinburgh, with an annual total return of 14.7 per cent.

Bank Note: Scotland’s economy continued to grow in May, but at a slower pace than the previous month, the Bank of Scotland reports.

In its latest Purchasing Managers Index the bank suggests “solid” private sector expansion in May, though manufacturing exports dropped to their lowest level in five months. Output continued to rise in April, the survey of purchasing managers found, prompting businesses to expand to meet demand as backlogs fell for the first time this year.

The number of new jobs created across the country also continued to rise for the eighteenth, the bank said, although at the slowest growth rate in four months and well below the UK average.




Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Recent Posts

The best places to stay on the Riviera

The latest property data has identified Newquay as the fastest property seller’s market in the UK

Investing in your garden can increase your property’s value

French Riviera temping high-end homebuyers

How can the ownership rights of my commercial property impact a business sale?

Should I incorporate virtual property viewings permanently?

Investment expected to increase across Asia-Pacific in 2021

UK property industry slows as the conclusion of tax break looms

BNP Paribas cautioned investors on Friday as debt-trading bonanza that increased its earnings this past year

Over 300,000 property purchases fell through in 2020 – we show the most frequent motives and the best way to get your house sale back on track

House Prices in the Capital Surpass £500,000

Optimism from the Bank of England’s chief economist

The most expensive commercial properties.

Businesses operating from shared premises will miss out on grants

BA cuts 12,000 jobs, unions hit back

Media Streaming Service See Record Subscriptions