Speculative development fears aired

Referendum impact felt by market

The post-Brexit Scottish commercial property market has seen occupier demand improve.

In the retail sector, consumers reacted negatively to the referendum but confidence quickly returned and spending held up well in the absence of information from the Government regarding plans to exit the EU.

Some retailers will keep expansion plans on hold until more information is available. Demand has held steady, although the prime centres of Glasgow and Edinburgh remain the focus for occupiers with a more cautious approach towards other locations.

Competition from online retailing will increase and, in many cases, vacant town centre space will be put to alternative uses.

The office market experienced difficulties in the run-up to and aftermath of the referendum, and conditions vary across the main Scottish cities.

The hot topic at the moment is the worrying lack of available grade A space, particularly in Glasgow and Edinburgh where some older buildings are being acquired for redevelopment for alternative uses including hotels and serviced apartments.

Although there is uncertainty, there are organisations that wish to expand but are unable to due to the lack of suitable office accommodation.

The referendum had an effect on the industrial sector too, but sales and letting levels have held up well and vacancy rates for quality units remain low, particularly in the central belt.

These are positive market conditions, but new development and refurbishments remain hindered by rising costs and the reduction in vacant rates relief which has caused some owners to demolish buildings to save void costs.

There are signs of some development activity interest, but it is limited.

The Queensferry crossing will open shortly bringing benefits to regions beyond Fife and the central belt, although the oil and gas industry remains affected by the lower oil price which has an adverse effect on markets from Aberdeen to Dundee and Fife.

Dundee One was one the largest speculative office developments in the city for years, but it is only partially tenanted.