13 Dec 2016
Policy area: Finance
The Scottish Government should take positive steps to boost commercial property investment to aid economic development following the release of figures showing a fifth quarter of decline in Scottish commercial real estate investment levels in Q3 (June to September 2016). That was the message put to Cabinet Secretary for Finance & the Constitution Derek MacKay MSP in a submission by the Scottish Property Federation (SPF) ahead of Thursday’s Budget Statement.
The SPF has written to the Cabinet Secretary with a framework of 16 key proposals, including:
The SPF’s analysis [See Notes] shows the total value of all commercial sales in Scotland between July and September 2016 (Q3) fell to £636m – 22.3% down from Q2 2016 and 6.5% lower than in Q3 2015. Aberdeen continues to see a major market realignment while Glasgow posted its lowest quarterly total sales value since Q2 (Apr-Jun) 2013. In Q3 the city saw £53.9m in sales of commercial property from 114 transactions, down 73% in both quarter-on-quarter and year-on-year comparisons.
In addition, SPF noted with some alarm that there is no speculative Grade A office development anticipated in the city until 2019 at the earliest. Edinburgh is also suffering from a lack of speculative commercial development despite reports of good take-up of office space.
David Melhuish, Director of the SPF said:
“The latest investment transaction figures show that there was already a marked dip in commercial sales for investment across Scotland up to Q2 2016 - something that the uncertainty caused by EU referendum did nothing to correct.
“That’s why it’s more important than ever that the Scottish Government uses the policy levers at its disposal to show that Scotland means business when it comes to growing the economy, creating jobs and expanding the tax base sustainably.
“We have suggested sixteen measures, including making business rates competitive, reforming empty property rates to support new development and reforming the 5 per cent residential LBTT rates and would urge the Cabinet Secretary not to delay before providing the support that the sector and wider Scottish economy needs so urgently.”
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Notes to editors
Read the Scottish Property Federation’s letter to Derek MacKay here- http://www.scottishpropertyfederation.org.uk/what-spf-do
About Scottish Property Federation
As a membership organisation the Scottish Property Federation (SPF) is the voice of Scotland’s real estate industry. Established in 2007, SPF represents 185 organisations operating in Scotland. We include among our members: property investors including major institutional funds, developers, landlords of commercial and residential property, and professional property consultants and advisers. The SPF works closely with those who advise and decide on public policy in Scotland to ensure that they are aware of the consequences of their decisions for the property industry and wider economy.
As part of the British Property Federation we also benefit from close links with the leading UK property companies and investors in the UK as well as the BPF's contacts with Westminster.
For more information, please visit http://www.scottishpropertyfederation.org.uk or follow us on Twitter @ScotPropFed