Recent figures suggest that Scotland's share of UK investment has continued to increase despite the imminent referendum, one month from today. A report from global property advisers, Colliers International, suggests that there is a considerable pipeline of deals across Scotland, but that as the referendum draws near, many deals are on slow boil with investors seeing little risk in waiting for a month to see the outcome. If the referendum is impacting, Colliers claims that it certainly has not stopped the market, but rather it has slowed what may turn out yet to be a very strong year.

With July transactions amounting to £83m, Scotland’s share for the third quarter of 2014 looks to be around 4.5% and headed back toward long-term trend. Aberdeen and its energy economy may explain a substantial part of this trend.  In the last three months, Aberdeen accounts for roughly one-third of all Scottish transactions.

Tom Johnston, Joint Head of Scotland at Colliers International, said, “As the referendum draws near some investors have taken the view that it won’t hurt to wait. However, it is very much a two way street and many investors are still chasing prime opportunities where there is decent product available, evidenced by two shopping centres and a prime industrial park having just gone under with reputably several under-bidders. I suspect that when the dust settles on September 19, the market will accelerate. We’re certainly gearing up for that ourselves and taking the opportunity to move into new offices.”

In summer 2014, Colliers International released a report entitled Scottish Referendum: A property investor perspective. The report showed that despite investor concerns that investment levels in Scotland appeared to be moving in line with the rest of UK regional markets. UK institutions were net investors with property companies the chief sellers.  So concern about the upcoming referendum did not appear to be reducing investment levels significantly, although the evidence also suggested that concerns may have prevented levels from being substantially higher.

Since 2000, Scotland's share of all UK property investment averaged 4.7% with a peak reached in 2004 of 7.7%. In Q1 13, the share reached a series low of 2.3% reflecting no doubt Eurozone worries and investor flight to prime. At this time, Greater London's investment share was still near its peak of 57%, but has since fallen to 47% as improved confidence led investors to search for yield in the UK regions.

Walter Boettcher, Chief Economist for EMEA at Colliers International, said, “ I think many of the forces at work in the Scottish property market are also at work in the general Scottish economy. Despite strong expansion, the Scottish economy has been lagging the rest of the UK for some time according to regional purchasing manager indices.  Once the referendum is behind us, I expect this to change rapidly and for growth to accelerate further.”

Collier's report concluded that a property occupier market boom was in the making for the year end irrespective of the referendum outcome.  A 'Yes' vote would result in a professional services boom, a 'No' vote would release 'pent-up' leasing demand as companies found greater certainty.  We see little reason to change this view, with the added proviso that the evidence of a property investment boom on the back of a 'No' vote looks even more compelling.