Election uncertainty’s toll on property investors
Scotland’s commercial property market has been dogged by pre-election political uncertainty with investment deals falling by 15 per cent in the second quarter, new figures have revealed.
Transaction volumes during the three months totalled £272 million, down 15 per cent on the same period a year earlier and 31 per cent below the five-year average, according to the latest findings from property advisory firm Lismore Real Estate Advisors.
The firm noted that a smaller number of larger ticket sales, combined with “continued uncertainty” in the market over the timing of future interest rate cuts and the impending general election had affected transaction volumes.
The largest deal to be concluded in the second quarter was the £45.8m acquisition of 1 West Regent Street in Glasgow, by Corum Asset Management, followed by re make Asset Management’s £36.6m acquisition of HQ buildings, 2 Greenmarket in Dundee and 4 Pacific Quay in Glasgow, let to BT and STV respectively from Londonmetric.
Lismore director Chris Macfarlane said: “Despite a slower than anticipated quarter, buyer-seller standoffs are easing, with increased buyer activity and momentum improving.
“We anticipate that the expected interest rate cuts by autumn may improve debt terms. Amid the general election, we hope the victor fosters optimism, creating a businessfriendly environment for sustained economic growth.”
Lismore noted that logistics and multi-let industrial properties continued to see strong demand, with prime yields around 6 per cent. Office yields were improving, it added, while retail parks offered “compelling value” with 6.5 to 7 per cent yields.