11 Aug 2017
For the first time since 2012 the total value of commercial property sales in Scotland has fallen in two consecutive quarters according to figures released from the Registers of Scotland and analysed by the Scottish Property Federation.
The total value of commercial sales in Q2 2017 (April to June) fell to £785m, down from £795m in Q1 2017 and £982m in Q4 2016. The figures also show that there was a year-on-year decline in the value of commercial sales, which were 4.2% lower than in Q2 2016.
Investment in Scottish commercial real estate also fell sharply with CoStar reporting £330m invested across all commercial property sectors in Q2 2017 - a drop of 60% quarter-on-quarter and 42% below the five-year average.
Regionally, Edinburgh continued to show its strength with £260m worth of sales in Q2 2017, accounting for a third of the Scottish commercial property market value in the quarter. The Capital also sustained its dominance of the market in Scotland with strong year-on-year growth in total sales values, up 16.6% compared to Q2 2016. This is in contrast with Glasgow, for example, which saw a 9.7% fall in sales values.
A partial recovery appears to be taking place in Aberdeen after challenging market conditions in 2015 and 2016 caused by the collapse in oil prices. In the first 6 months of 2017 the total value of commercial transactions in Aberdeen was £177m, up from £75m in the same period in 2016 - an increase of 136%.
David Melhuish, Director of the SPF, commented:
“The figures reflect the unsettled and unequal nature of the current commercial real estate market in Scotland, with Edinburgh continuing to grow ahead of other locations.
“Despite better news recently for the wider economy in Scotland, the commercial real estate industry is not seeing this translated into increased sales and investment.
“We expect the commercial property investment market to continue to be a challenging environment to operate in the immediate future, making it more vital than ever for Scotland to show that it is open for business and is willing to compete for investors”.
Notes to Editor
The Scottish Property Federation’s full analysis of the figures is available here > http://www.scottishpropertyfederation.org.uk/sites/default/files/resources/Commercial%20Sales%20Apr-Jun17.pdf
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 on Twitter @ScotPropFed