‘The world doesn’t stop spinning’
leased in 2018 while JLL advised on just over 1m sq ft of the total volume transacted and was involved in four of the top five deals.
He agrees that retail has its own unique and well-publicised problems but says the office and industrial market is in good health and foreign investment is continuing with Edinburgh in particular a big beneficiary.
“We are also seeing more UK buyers back in the marketplace,” he adds. “The inspiring sale of Skypark in Glasgow to Hermes Investment Management was a really good, solid UK institutional purchase, one you probably wouldn’t have seen a few years ago.”
Lonestar, which bought Skypark in 2015 instructed JLL to market the office investment and development opportunity in 2017 and it sold for more than the £80 million expected.
“The levels of debt in the property market are a lot less than they were in the times of the financial crisis. The loan to value levels of debt are much lower, so the system is much more robust from a lending point of view,” he adds.
There are other irritants though, one being the recent change to the Land and Buildings Transaction Tax (LBTT) with the upper rate for commercial property increasing from 4.5% to 5%, standardising Scottish with English rates.
“Bringing Scotland’s commercial rates into line with England’s is likely to erode any competitive edge our market previously had over England. As always investors are looking for value, and Scotland’s relative worth has helped it stand out when compared to London or other regional hubs in recent years,” he says.
Humphery concedes that there is a fear that the current uncertainty will result in a slowdown but says JLL has anticipated that and built it into the business plan. “It’s convenient to blame everything on Brexit and while it’s certainly a factor it’s not the only one.”
And while he says it’s perfectly understandable for investors to be somewhat more cautious (“It’s just human nature”) he says there are plenty of good news stories, including the increase in lettings of office space in Aberdeen, the demand from the booming technology sector in Edinburgh and alternatives such as hotels, healthcare and student accommodation which are becoming more mainstream.
“The breadth of demand is very healthy,” he says. “What’s nice to see is there are investors out there still positive about our market and occupiers are still doing deals. It might take a bit longer – but the world doesn’t stop spinning.”
NEW DEAL AT SKYPARK
Skypark, the business campus in Glasgow’s Finnieston district, has announced the completion of a further letting to engineering consultant Blyth+blyth, following recent deals with Stena Line and Lloyds Register.
Blyth+blyth will relocate its Glasgow base, taking 3,467 sq ft of office space in Skypark 1 on a 10-year lease, beginning this month. The firm dates from 1848, when Benjamin Hall Blyth started a civil engineering practice in Edinburgh and specialises in building design, civil engineering, infrastructure and industrial project management.
Martin Mccrossan, director of Blyth+blyth said that the company had taken the opportunity to relocate its Glasgow office to the campus as a result of continued growth and a number of exciting future prospects. “Skypark will provide modern open plan office space designed to enable collaborative working across our civil, structural and building services teams,” he said.
The new office includes flexible working space, meeting rooms incorporating video conferencing facilities, improved staff facilities and room for expansion of the current team of 18.
Stephen Ellis, senior asset manager at Hermes Investment Management, the £33.5 billion fund manager behind Skypark, said: “This letting with Blyth+blyth adds to the growing roster of high-profile names relocating to Skypark, evidencing the ongoing appeal of its unique market-leading offering which supports the diverse needs of both new and existing tenants.”
Skypark was represented by Resonance Capital and Ryden represented Blyth+blyth. email: colin.cardwell@ heraldandtimes.co.uk