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Another strong year forecast for Scotland’s property investment market

Scotland’s commercial property market celebrated a bumper year in 2013, growing faster than most other parts of UK outside London, according to David Davidson, Managing Director of Cushman & Wakefield in Scotland.

Despite earlier fears that the Scottish Independence Referendum would affect confidence last year, Davidson believes it is having little impact on investors’ desire to buy commercial property north of the border.

The 2013 total of £2.078 million is an 81% increase on 2012 when total transactions amounted to £1.15 billion.  The value of investment transactions is the highest since 2007, which was the best year ever when investment volumes peaked at £3.33 billion in Scotland.

This increase is 21% higher than the figure for the UK market as a whole which has increased from £31.6 billion to £50.7 billion. This is a  60% increase.

However the UK market is now trading at 87% of its peak volume, whereas Scotland is at 62% of its peak volume.

According to Davidson, 2014 is already off to a flying start in Scotland with over £645 million of stock carrying over into the new year, most of which he predicts will sell in the first quarter of 2014. In addition, Cushman & Wakefield has identified over £131 million of stock which could come on to the market in the first quarter of 2014.

Significant transactions that are believed to be under offer or concluded in January include:


New Uberior House / Princess Exchange 

£60 million



Overgate Shopping Centre

£125 million



Rolls-Royce Manufacturing Warehouse

£57 million

The £845 million also includes five potential sales in Aberdeen which are all over £50 million.

Davidson commented: “This has been one of the busiest starts we have ever had to a new calendar year and leads us to a very positive outlook for 2014.

“The Scottish Independence Referendum appears to be having no material impact on the Scottish investment market. Whilst some investors may be trying to reduce their holdings in Scotland, there are far more players who are prepared to bid at closing dates to secure high quality assets which have not been available elsewhere in the UK outside London.

“I am also encouraged that Scotland’s strong performance in 2013 is still well below the pre-recession level. Scotland has much further to travel to recover than the south east of the UK.”

The other important feature of the commercial property investment market according to Davidson is that pricing continues to be fully in line with regional markets in other parts of the UK, like Birmingham and Manchester. Also, there is a widely felt expectation that investment yields will fall further in 2014.

He added: “2013 has been a record year for the Scottish investment market and we confidentially predict that there is sufficient investor appetite for 2014 to be just as strong.”

Cushman & Wakefield’s statistics show 2013 got off to a very slow start with only £515 million of transactions in the first two quarters but finished very strongly with £987 million  in the last quarter. 

The office sector dominated with £949 million worth of transactions for the year.  Significant transactions included the funding for ScottishPower’s new headquarters in Glasgow at £113 million, the sale of Calton Square in Edinburgh for £56.75 million and two December transactions, the sale of Union Plaza in Aberdeen for £55.5 million and the off market sale of Capella in Glasgow for over £40 million. 

The total for retail transactions was £774 million for the year, dominated by two large shopping centre sales where Cushman & Wakefield acted for the vendors. These were the sale of St Enoch’s Shopping Centre in Glasgow for £189.15 million and the sale of Bon Accord & St Nicholas Shopping Centres in Aberdeen for £189 million.  The next largest retail transaction was the Livingston Designer Outlet at £51.5 million.