13 Nov 2015
Policy area: Commercial
The value of commercial property transactions in Aberdeen saw a dramatic fall in Q3 2015, falling from £201m to £50m quarter on quarter.
Figures from the Registers of Scotland, analysed by the Scottish Property Federation (SPF), suggest that Aberdeen’s commercial property market is beginning to reflect the wider economic factors surrounding the energy industry, following a few large transactions in Q2.
The Aberdeen fall led the total value of commercial property sales in Scotland to drop from £963m to £855m, with Edinburgh returning the highest value of sales figures in Scotland in the Q3, which increased to £277m, up from £231m the previous quarter.
The volume of commercial property transactions increased by 15% from 956 in Q2 2015 to 1,107 in Q3 2015, higher than all other quarterly returns for the last two years bar the post-referendum quarter. Despite the fall in value, this suggests a continued increase of activity in most local commercial property markets in Scotland. There were 253 transactions in Edinburgh and Glasgow again reflecting just under a quarter of all commercial property activity in Scotland.
The figures also showed a steady improvement in the number of higher value transactions (those over £5m), from 34 in Q2 to 38 in Q3.
David Melhuish, director of the Scottish Property Federation, commented: “The fall back in the energy sector in Aberdeen has had an effect on the local property industry along with other industries. The first half of this year saw the city’s commercial property sales boosted by a small number of large value transactions, but the dramatic drop in value this quarter brings it in line with wider economic trends, and reflects how we would have expected to see the market perform earlier in the year.
“The overall drop in commercial property sales value is a concern, even accounting for the particular influence of the fall in Aberdeen sales. For the Scottish property industry the key thing is for government at all levels to understand that we are competing for international capital for our industry and this means we need a regulatory environment that is positive for businesses and investors to locate here in Scotland.”