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Scottish commercial property market outperforms UK, Colliers report shows

13 11 19 scotland

Strong Q3 investment means investment should still pass £2bn by year end.

The Scottish commercial property market is weathering the Brexit storm far better than its counterpart south of the Border, according to the latest figures from Colliers International. 
The commercial property specialist’s Q3 Scotland Snapshot showed that total investment volume for the first nine months of 2019 was down by 12% year-on-year in Scotland, as the slowing economy and uncertainty over Brexit and the global outlook caused property investors to take a cautious approach.
However, the impact on Scotland has been muted in comparison with the UK as a whole, where commercial property investment is down 26% against the first three quarters of 2018. 
Douglas McPhail, head of Colliers International in Scotland, said that investment in Scottish property hit a one-and-a-half year high of £717m in Q3 - compared to £347m in Q1 and £619m in Q2.
“Although investment volumes during the first nine months of the year are down by 12% compared to the same period in 2018, it is very likely that activity will break through the £2bn mark for the sixth year running,” he said. 
Mr McPhail added that the proportion of international money flowing into Scottish property actually rose in Q3, to around 60%, with particularly strong interest from Middle Eastern (£182m) and US (£160m) investors. 
Scotland’s outperformance comes despite a greater reliance on overseas investors, who account for around 55% of Scottish investment and 43% of UK investment. These investors face a further risk from the fluctuations of the pound and the uncertainty as to how it will perform after Brexit, but continue to choose cities like Edinburgh and Glasgow in their international search for yield.
Patrick Ford, director of Capital Markets at Colliers International in Glasgow, added: “By city, Glasgow was the star performer, attracting £278m of capital, closely followed by Edinburgh at £226m. The largest deal of the quarter was Hines Global Income Trust’s purchase of the ‘true Glasgow West End’, a 607-bed operational student asset, traded for £72m. This was followed by Ashby Capital’s acquisition of Abbotsinch Retail Park in Paisley for £67m - at an initial yield of 7.8%. Completing the top three deals is Arbah Capital’s purchase of Glasgow’s Sauchiehall Building - a leisure and retail mixed-use asset – for £55m at 6.3% yield.”
These deals mean Glasgow’s booming office market is expected to bypass the five-year average of 700,000 sq ft by the end of 2019. 
“Demand for space remains healthy and a lack of stock will continue to exert upward pressure on rents,” Mr Ford said. “In Edinburgh, the office market characterised by lack of existing stock. A number of significant requirements cannot be met by existing supply and are likely to result in pre-lets.”

Retail property investment also rebounded in Q3 following a slow first half of the year, with Colliers’ figures showing volumes rising to £155m, up from a very weak £38m in Q2. Among the highlights, Franklin Templeton acquired Edinburgh’s Cameron Toll for £38m - at 8% initial yield - in Scotland’s first significant shopping centre deal in 18 months. 
In Aberdeen, Q3 2019 saw the largest office deal in three years with the letting of 51,356 sq ft at B3, Aberdeen International Business Park, to Oceaneering.

Related Experts

Douglas McPhail

Head of Scotland

Investment Property Management


As department head, Douglas has overall responsibility for approximately 500 properties under management with a total rent roll in excess of £230million.  Helpdesk for tenant/occupier use and a full property accounts team.  He has developed the business management procedures required for ISO9001 accreditation used by the CCRE IPM department across the UK.

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Patrick Ford


National Capital Markets


I am an experienced Director working closely with my capital market colleagues throughout Colliers UK. I have a proven track record of deal delivery which includes some of Scotlands most high profile commercial property transactions.

I actively advise clients on property investment acquistions and disposals throughout the country and across the UK.

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Hannah Zitren

Associate Director

Marketing & Communications


I am responsible for media relations and generating coverage in top tier broadcast and print media. I work across a range of Colliers’ UK & Pan-EMEA business lines advising on their strategic and tactical PR needs.

My role includes:

·         Developing and executing PR plans for the various business lines to help promote their key messages across all aspects of the media - print, broadcast and social.

·          Media evaluation and reporting objectives, targets and successes across the business.

·         Reputation management and crisis management.

·         Media training.

·         Media engagement: setting up meetings with top tier media and various internal spokespeople to continuously expand and build a presence with property and vertical media network.

·         Consistently delivering service excellence, meeting with business heads of a regular basis and trying to influence the research as much as possible to ensure our content has a strong enough news hook.

·         Key campaigns that I work on include MIPIM; MAPIC; REVO; Midsummer Retail Report; IHIF; Cities of Influence in addition to a host of all alternative property sector research reports.

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