The news for commercial property investors in Scotland is not encouraging, as returns were in the negative range for the first time since the 2009 property bust. Second quarter returns came in at -0.1 per cent, and were down from 0.1 per cent in the previous quarter. These numbers were revealed in the latest figures included in the Scottish Property Quarterly from CBRE.
When the figures are considered on an annual basis, the numbers remained in the black, with total returns coming in 1.8 per cent. They are still below the total figures for the United Kingdom of 4.4 per cent.
The main cause of the disparity between total returns in the two countries was the performance of the disappointing performance of the Scottish office market. Quarterly returns in the sector of the market were down 0.5 per cent. In contrast, the UK market saw an increase in quarterly returns of 0.9 per cent, according to CBRE.
The central London office market was particularly strong, which skewed the figures for the United Kingdom. Except for the south east and London offices, total returns for the quarter came in at -0.8 per cent, which meant that Scottish offices are performing well in comparison to most other regions in the United Kingdom.
The report went on to state that the total value of transactions in the Scottish market reached £134 million in the period from July-December 2012. This figure was 56 per cent lower than the previous quarter and the lowest since the start of 2009. As a result, the total for the first half of the year is £439 million, which is 31 per cent lower than the same period in 2011.
The largest transaction of the quarter was the £22.4 million purchase of a distribution warehouse at Renfrew Road, Glasgow. The property will be let to TDG until 2027 by Gatehouse Bank.
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