Scotland Hits The Buffers After 11 September

EDINBURGH-A good year for Scotland came to an abrupt halt on 11 September. That’s the conclusion of research by Scottish surveyor Ryden. Its 49th Scottish Property Review predicts that the economic slowdown coupled with the terrorist attacks on the USA will have an adverse effect on the office, retail and industrial commercial property markets throughout Scotland. Ryden does not call how hard Scotland will be hit, however.

The Glasgow office market has had a strong year. The six months to September 2001 produced take-up of 525,000 sq feet, resulting in a healthy 12 month total of 830,000 sf, well above the long term average of 650,000 sf.

Large organisations in Edinburgh are adopting a “wait and see” stance but there has been increased activity and enquiries at the smaller end of the market. Total annual take-up for 12 months (754,616 sf) is down from the 1 million sf volume of recent years but closer to the 10-year average take-up of 775,000 sf.

In the oil-boom-town of Aberdeen, take-up of office accommodation in the six months to September 2001 fell by 53% to 110,000 sf, although the total number of completed transactions (45) is similar to the previous period.”

The western part of the M8 motorway–the key industrial distribution location in Scotland–remains positive with a number of logistics operators rationalising existing property portfolios and investing in large regional distribution facilities. And while Amec’s successful speculative development Colossus at Eurocentral may not lead to a spate of speculative developments, developers with suitable distribution sites may be optimistic.

At the other end of the M8, in Edinburgh’s Newbridge area, cautious speculative development has produced results at for Hanover Property Unit Trust and Welbeck Land Edinburgh Interchange with three units already under offer. Developer Kenmore has also recently purchased in the area.

In Aberdeen, the recovery of the industrial market has continued on the back of increased offshore investment. The last six months’ take-up at 520,661 sf shows a 46.5% increase on the previous six months.

In the investment market, declining equities makes property look good. Although the institutions are standing back, there are new private investors in the market and geared property companies have been busy–especially in the shopping centre market. In the office market, Glasgow take-up to year end September increased to 890,000 sf exceeding Edinburgh for the first time since 1996. There has also been strong demand for single industrial units.