The Scottish commercial property market is continuing its slow recovery according to the latest figures. CBRE’s quarterly MarketView reveals that, while Scotland continues to lag behind then rest of the UK, property returns rose to 0.2 per cent during Q1 reflecting a slowdown in the decline of capital values across all sectors.
The report records that £123 million was invested in Scottish commercial property over the quarter, over half of which was in the office sector where the decline in rental values fell from 0.7 per cent to 0.3 per cent.
There were also improved showings in the retail and industrial sectors indicating a general improvement in the Scottish economy. Retail property delivered total returns of 0.1 per cent which the report describes as ‘marginally positive’ in comparison with the previous quarter.
Industrial property proved to be the strongest performing sector and, on an annual basis, slightly outperformed the UK as a whole despite the fact that factory output was marginally down in March.
Aileen Knox, senior director of CBRE Scotland explains that the overall UK performance is largely driven by the robust markets in London and the South East and if these were removed from the equation, Scotland would emerge as one of the UK’s strongest performing regions.
“Our research shows signs of modest growth across Scotland’s commercial property market, indicating that the Scottish economy is continuing its slow recovery from the recession,” she said.
This is underlined by the news that unemployment is Scotland is now lower than the UK average and job creation rose to 39,000 between December and February. There is also some encouragement for the Scottish high street where sales figures held up well despite the poor weather conditions.
Scotland’s commercial property market was badly affected by the recession and this report, showing a steady if unspectacular improvement, will be welcomed by investors.
A separate survey by RICS finds similarly encouraging signs in the Scottish residential market.
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