Sales of commercial property in Scotland slumped by 40% in the first quarter of 2012 as the industry reeled in the face of the double dip UK recession and the spectre of an increase in empty property rates in Scotland.
The value of commercial property sales plummeted by a staggering £235m to £355 in Q1 with a 20% reduction in the total volume of sales.
Despite a relatively stable performance in the last quarter of 2011 the figures reflect another downturn for the commercial property industry and supports the recent report by the Investment Property Databank of a renewed downturn in commercial property values which play an important part in underpinning the wider economy. Many in the industry expect things to worsen as the Scottish Government plans next year to reduce empty property rate relief, dubbed a ‘tax on failure’. This will add a further disincentive to invest in development and regeneration at the worst possible moment as the market continues to show weak demand.
David Melhuish, director of the Scottish Property Federation, said: “The commercial property industry broadly mirrored the wider economy in the first quarter of 2012 as it entered a double dip recession.
“The Scottish Government really must take notice of these figures and think again about the planned increase in empty property rates. With such weak demand and both the value and volume of sales falling sharply, this really isn’t the time to increase tax on unproductive premises.”