Market thrives on risky business
It’s a new part of the market that’s quite important but it depends on who collects the stats as to how you define these deals”.
While local and European investors have been hesitant, other international investors have, he says, been a significant help to the market though they almost always invariably make first landfall in London to acclimatise to the UK market environment. “Then they go to Edinburgh and after that Glasgow, Manchester and Birmingham and we find a large number of our clients doing that,” says Davidson.
Noting that there is very little commercial property under development in Edinburgh – though he does think it likely that M&G will begin its delayed Haymarket project in 2020 – he’s encouraged by JP Morgan’s long-term commitment to Glasgow with a new HQ on Argyle Street combined with Barclays’ Buchanan Wharf development.
“These schemes are already subject to client interest and that will continue, irrespective of politics,” he says.
While believing there is further distress to come in the retail sector he points to the number of retail parks south of the border now starting to trade after two or three years of a major standoff between sellers and buyers over price.
“The pricing seems to have come to the point now where investors are happy so I think we will see more retail parks selling.”
Davidson says he is “perhaps surprisingly optimistic about the prospects for 2020. As long as occupiers keep moving investors will continue to look at Scotland as an attractive destination. If that stops, it will concern investors who will read into it that it is politically motivated, such as after the 2014 independence referendum. That hasn’t happened – yet – and on the upside other occupiers will continue to look for the best environment for their business and their staff.”