The number of Scottish business looking for premises continued to rise during the final quarter of 2013, a Royal Institution of Chartered Surveyors (RICS) survey has shown.
Increasing optimism about the economy and a greater willingness to lend by the banks and financial institutions filtered through to the commercial sector to produce an “upbeat” picture, according to the RICS commercial market survey. And for the first time since the onset of the recession 48 per cent more surveyors in Scotland reported an upsurge in demand for shops, offices and industrial spaces.
“The Scottish economy ended 2013 on a much more positive note and this was reflected in stronger demand from tenants, although the improvement is still tentative at this stage,” said the institute’s Scotland director, Sarah Speirs.
Reflecting the recovery across the rest of Britain, 46 per cent more chartered surveyors in Scotland reported a rise in enquiries from people wanting to invest in retail space. This looks set to continue, says RICS, with strong indications of a further increase in the volume of retail transactions over the first quarter of 2014.
“The shift in the retail market has been largely driven by the improved fortunes of the consumer and this is now feeding through, slowly but evidently, to the high street,” added Speirs. “Should the economic momentum continue to gather pace we would expect the recovery in the commercial property market to gain further traction, particularly if interest rates remain on hold.”
There was one note of caution from the survey. Of the RICS members questioned, 33 per cent had noticed a decline in availability of commercial property, mirroring the lack of new developments in recent years.
“The greatest activity remains in the prime locations with acute shortages of smaller properties. However, there are signs of growing interest for new build solutions given the absence of suitable stock,” said surveyor Alan Gilkison.
Confirming the claim that sources of finance are now opening up to businesses north of the border is a recent statement by Santander’s UK division that it has increased lending to Scottish small and medium enterprises by 71 per cent.
Although the bank declined to give a total figure for its activities in Scotland, it did outline that it advanced £305m of new facilities to SME customers in 2013; a rise of more than 90 per cent from the £160m of the previous year.
Recent Scottish Government figures also support the growing commercial demand by confirming the nation’s GDP has risen for the sixth consecutive quarter, with a July to September, 2013, rise of 0.7 per cent.
Finance Secretary, John Swinney, said the latest figures suggest the pace of recovery is “accelerating” and the economy “further strengthening” against a backdrop of continuing economic challenges. “The emerging picture from recent business surveys also supports our confidence in the recovery,” he added. “And there will be no let-up in the Scottish Government’s commitment to securing economic growth.”
