Scottish commercial property sales ‘at lowest level for 10 years’
Scotland’s commercial property sales have suffered the worst quarter in a decade, according to Scottish Property Federation (SPF) analysis of the latest commercial property sales figures from the Registers of Scotland.
At £285 million, the total value of commercial property sales for Q2 (April-June) 2020 dropped 43% on the first quarter of the year and 54% compared to the same period in 2019.
Naturally, second quarter activity was heavily affected by the coronavirus crisis and restrictions on property transactions and registrations. As a result, Scotlands two largest cities Edinburgh and Glasgow both saw a dramatic decrease in activity during Q2.
Edinburgh recorded the highest value of sales for Scotland, with £91m transacted over the quarter, significantly down on both the previous quarter and Q2 2019, which saw sales of £126m and £108m, respectively.
Glasgow also saw activity affected heavily by COVID-19, with total sales of £24m, some £148m (86%) down on the second quarter of last year.
David Melhuish, SPF director, said: “The SPF conducted a survey of commercial property owners in May that foreshadowed the extent that the industry would be effected by the pandemic. While reduced activity in the commercial property market was expected for this quarter, these figures indicate a much deeper and more rapid fall than we saw even at the time of the financial sector crisis in 2008-09.
“The extent of the fall in sales reveals a weakened wider economy, and consequently a reduced level of investment activity.
“The commercial property sector is facing a perfect storm of loss of income, minimal market activity and increasing liabilities in the form of empty property rates as businesses close stores or delay office moves.
“Unless we see a return to a sustainable level of business activity, the sector will struggle to produce the new buildings and places for a modern workforce, or to provide the quality property investments sought by long-term investors that provide reliable income returns for pension and life funds.”