Ryden’s 66th Scottish Property Review Results
Ryden continually monitors the commercial property market in Scotland and publishes a report every six months. The latest findings were announced at the end of April.
Our figures showed there is activity in the occupier markets but it remains suppressed, particularly in the retail sector. The investment market bottomed out in Q2 2009 and thereafter enjoyed a sustained recovery at the prime end of the market as UK institutions regained their appetite.
My belief is that this is the most diverse property market we have seen for many years. Opportunities and challenges vary more widely across Scotland’s locations and sectors than at any other point in the market cycle. Anticipated cuts to public spending are likely to further polarise these market differences.
In summary, the key findings for the main property sectors indicated:
Offices
- Demand for offices in Scotland’s major cities continues at reduced but steady levels
- Sales and lettings are running at around 75% of the long term average
- This resilient performance during a recession is bolstered by larger deals in Glasgow and an active market for smaller open-plan offices in Edinburgh
- A lack of new development is expected to put a floor under the market, positioning the office sector for recovery as economic growth resumes and unemployment peaks at a lower level than had been forecast
Industrial
- The industrial property market’s recession has been comparatively short and shallow, particularly in the West of Scotland
- Transactions in other locations have been smaller but still steady
- The prospect of market recovery including rental performance and investor interest is encouraging developers in some locations to begin to prepare proposals for new industrial schemes
Retail
- The retail sector’s recession began well before the economic downturn and continues
- Consumer expenditure has held up reasonably well, but is skewed towards food sales and regional shopping centres
- Many established towns are at the mercy of weak retailer demand and rising vacancies
- Rental value decline remains latent in many centres due to lack of transactional evidence
For more information on consulting and market analysis services offered by Ryden contact Dr Mark Robertson on 0131 473 3293 or at mark.robertson@ryden.co.uk
