New research reveals top Scottish property sectors for investors

Key property development projects in Edinburgh and Glasgow are set to be delayed by at least six months with investors taking a “wait and see” approach to new opportunities, according to a new report.
The five-year take-up in Edinburgh is 870,000 square feet, with the first half of 2020 amounting to 150,000 sq ft. Vacancy rates in the city are only 2.8 per cent with new-build Grade A space even lower at 0.13 per cent, the Intelligence report noted.The five-year take-up in Edinburgh is 870,000 square feet, with the first half of 2020 amounting to 150,000 sq ft. Vacancy rates in the city are only 2.8 per cent with new-build Grade A space even lower at 0.13 per cent, the Intelligence report noted.
The five-year take-up in Edinburgh is 870,000 square feet, with the first half of 2020 amounting to 150,000 sq ft. Vacancy rates in the city are only 2.8 per cent with new-build Grade A space even lower at 0.13 per cent, the Intelligence report noted.

Releasing its inaugural Scottish investment market review, Lismore Real Estate Advisors said the shock of the coronavirus crisis continued to impact the country’s commercial property market.

It found that after an encouraging first quarter, at the half year stage Scottish transaction volumes were down by some 70 per cent against the five-year average over the same period.

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The firm’s review, which will be conducted on a quarterly basis, found that the majority of investors were focused on income protection and rent collection, while taking a wait and see approach to new opportunities.

The study noted that key development projects in both of Scotland’s largest cities were set to be delayed by “at least six months”.

Research undertaken with a “wide range of leading investors” by Lismore indicates that almost 50 per cent expect to purchase offices over the next 12 months, with 39 per cent selling and the remainder staying neutral. More than half predict that rents will remain static, with just 5 per cent predicting growth.

According to the report, overseas investors will continue to dominate the Scottish market, specifically from Asia, the Gulf nations and mainland Europe, particularly Germany. One of the key deals concluded during the quarter reinforces this with KanAm Grund Group acquiring 4 North St Andrew Square from Knight Property Group for £31 million.

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Build-to-rent, senior living, care homes and student accommodation are likely to be the “sectors of choice” for the remainder of the year and into 2021, Lismore added.

Director Chris Macfarlane said: “There are currently £300m in a small number of large transactions currently under offer in Glasgow and Edinburgh, but it remains to be seen whether these proceed or are renegotiated.

“Despite the uncertainty, Edinburgh will continue to succeed and remain attractive to UK and overseas investors, although the supply pipeline remains seriously constrained.”

The five-year take-up in Edinburgh is 870,000 square feet, with the first half of 2020 amounting to 150,000 sq ft. Vacancy rates in the city are only 2.8 per cent with new-build Grade A space even lower at 0.13 per cent, the “Intelligence” report noted.

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Last month, it emerged that Scotland had outperformed the rest of the UK in attracting overseas investors to commercial property with a number of assets under offer despite a recent slowdown in activity. The research by Colliers examined liquidity in the market before the global financial crash, spanning the years 2002 to 2006, compared to the period from 2014 to 2018.

Read More
Scottish property deals top £2 billion but outlook for 2020 is mixed - Colliers ...

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