Another Strong Year For Scottish Property Predicted

By Editorial 17 February, 2014

Scotland's commercial property market celebrated a bumper year in 2013, growing faster than most other parts of the United Kingdom outside London, according to David Davidson, Managing Director of commercial property brokers Cushman & Wakefield in Scotland.

Despite earlier fears that the Scottish Independence Referendum would affect confidence last year, Davidson believes it is having little impact on investors' desire to buy commercial property north of the border.

The 2013 total of GBP2.078m is an 81 percent increase on 2012 when total transactions amounted to GBP1.15bn. The value of investment transactions is the highest since 2007, which was the best year ever when investment volumes peaked at GBP3.33bn in Scotland.

This increase is 21 percent higher than the figure for the UK market as a whole which has increased from GBP31.6bn to GBP50.7bn. This is a 60 percent increase.

However the UK market is now trading at 87 percent of its peak volume, whereas Scotland is at 62 percent of its peak volume.

According to Davidson, 2014 is already off to a flying start in Scotland with over GBP645m of stock carrying over into the new year, most of which he predicts will sell in the first quarter of 2014. In addition, Cushman & Wakefield has identified over GBP131m of stock which could come on to the market in the first quarter of 2014.

Davidson commented: "This has been one of the busiest starts we have ever had to a new calendar year and leads us to a very positive outlook for 2014.

"The Scottish Independence Referendum appears to be having no material impact on the Scottish investment market. Whilst some investors may be trying to reduce their holdings in Scotland, there are far more players who are prepared to bid at closing dates to secure high quality assets which have not been available elsewhere in the UK outside London.

"I am also encouraged that Scotland's strong performance in 2013 is still well below the pre-recession level. Scotland has much further to travel to recover than the south east of the UK."

The other important feature of the commercial property investment market according to Davidson is that pricing continues to be fully in line with regional markets in other parts of the UK, like Birmingham and Manchester. Also, there is a widely felt expectation that investment yields will fall further in 2014.

He added: "2013 has been a record year for the Scottish investment market and we confidently predict that there is sufficient investor appetite for 2014 to be just as strong."

Cushman & Wakefield's statistics show 2013 got off to a very slow start with only GBP515m of transactions in the first two quarters but finished very strongly with GBP987m in the last quarter.

The office sector dominated with GBP949m worth of transactions for the year. Significant transactions included the funding for ScottishPower's new headquarters in Glasgow at GBP113m, the sale of Calton Square in Edinburgh for GBP56.75m and two December transactions, the sale of Union Plaza in Aberdeen for GBP55.5m and the off market sale of Capella in Glasgow for over GBP40 million.

The total for retail transactions was GBP774m for the year, dominated by two large shopping center sales where Cushman & Wakefield acted for the vendors. These were the sale of St Enoch's Shopping center in Glasgow for GBP189.15m and the sale of Bon Accord & St Nicholas Shopping centers in Aberdeen for GBP189m. The next largest retail transaction was the Livingston Designer Outlet at GBP51.5m.

Tags: Investment | Real-estate Investment | Real-estate | United Kingdom | Retail | Expats |


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