Several property experts have said that the Scottish commercial property sector is well on the road to recovery in 2022, following challenging times during the Covid-19 pandemic. Investment in the sector rose by 24% in 2021, with investment in the fourth quarter up 27%. In total, £1.3 billion was invested in the Scottish commercial property market last year, despite the challenges of the new Omicron variant.
Alasdair Steele, Head of Scotland Commercial at Knight Frank,the global property consultancy said:
"With a return to office working and the continued strength of industrials and retail warehousing, there could be a lot of activity in Scottish commercial property over the next 12 months – particularly from overseas buyers, as travel restrictions ease.”
For the first time in more than a decade, investment in industrial property and retail warehousing overtook investment in offices in Scotland. Together, retail warehousing and industrial property saw a combined investment of £541 million last year - accounting for almost one-third of commercial property investment in 2021. This is an increase of nearly 45% on the previous year and an increase of 29% on the pre-pandemic levels of 2019.
Research into the acquisition activity has shown that changes brought about by the pandemic have driven this.
While much has been written about the downfall of the traditional office environment as a result of the pandemic, investment figures tell a different story. CBRE, the real estate investment advisory service, has released figures showing activity in Scotland’s office markets in the final quarter of 2021. The information shows that office activity in Edinburgh has returned to pre-pandemic levels, with Aberdeen and Glasgow also showing recovery.
In the final quarter of 2021, office take-up in Edinburgh was up 101.8% on the previous quarter and 77.4% against the Q4 five-year average.
The Glasgow office market has also shown signs of recovery, while down in Q4 from the previous quarter, office take-up was 33.3% up on the same period the previous year. CBRE described the recovery as ‘much stronger’ than in other cities across the UK.
A survey published by real estate adviser Savills in early 2022 has shown the Scottish hotel market is also on the mend. Investment reached £185m in 2021, which is a 166% increase on 2020, which attracted £70m and a 12% increase on 2019, which attracted a total of £165 million.
Steven Fyfe, associate director at Savills, said:
“... our hotel market has performed relatively well over the last 12 months and we have seen renewed interest from investors who have shown confidence in the sector.”
Murray Beith Murray Partner, Bill Meldrum, is Head of Commercial Property and has a wealth of expertise and experience in commercial property matters. If this article has raised any questions, or if you require assistance, please complete our contact form or call 0131 225 1200 to speak to one of our commercial property specialist solicitors.
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