Bumpy ride for commercial property owners in Edinburgh and Glasgow

SCOTLAND’s major cities have seen a shift in their commercial property fortunes over the last three months with sales in Edinburgh down 19% on the previous quarter and 46% down on the same quarter last year.

The latest analysis of commercial property sales across Scotland from the Scottish Property Federation (SPF) shows sales in Glasgow rose – by 9% on the previous quarter – but were down 42% on Q2 2017.

The SPF said that for the second successive quarter, activity in Aberdeen exceeded that in the capital and Glasgow, with total sales of £123 million – 26% down on the previous quarter but 68% up on Q2 last year.

SPF director, David Melhuish, said Edinburgh and Glasgow were still attractive to investors.

“There isn’t a specific reason [for the fall], but the reality is that there is a limited amount of investible stock in Edinburgh and generally new stock has been occupied and sold quickly,” he said.

“Edinburgh remains attractive to investors and in terms of potential development, so does Glasgow which has a significant number of development proposals at various stages of planning.”

The SPF described sales of 110 commercial properties for £122m in Edinburgh and 129 sales worth £104m in Glasgow as “subdued” activity.

Nationally, the SPF said total values were down 29% on Q1 at £684m, a fall of 13% on the previous year, although the number of transactions rose from 1006 in Q1 to 1095 in Q2 – a rise of 9%.

This was the first fall in total sales values since Q3 2017 and a main factor was a lower number of high value sales.

Melhuish added: “Aberdeen continued to have marginally higher sales than both Edinburgh and Glasgow – especially note-worthy as Aberdeen had under half the number of sales than the other two.

“Looking at the bigger picture, across Scotland the recent data suggests that the commercial property sales market has been quieter than we have been used to in the past few years.

“That said, investment remains strong in Scottish real estate, with industry data experts CoStar reporting £584m invested into the sector in Q2.

“Overall, it was a mixed quarter for Scottish commercial property sales, with Aberdeen again showing signs of recovery, but subdued elsewhere.”

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