Commercial property slowing

Quarterly commercial property investment volumes in Scotland saw a 40 per cent year-on-year jump in the first quarter of 2020, but it looks like activity hit the brakes in April, according to Colliers International.

The amount reached £420 million in the period, up a notch from the £414m transacted in the previous quarter.

Colliers noted that transactional volumes remained below the five-year quarterly average of £581m, while the sale of the Springside PRS scheme in Edinburgh accounted for half of all activity by value (£215m).

“Overseas investors remained an importance source of capital and accounted for two thirds of all activity,” the property professional services and investment management company said. UK institutions were absent from the market in the quarter for the first time since the EU referendum in 2016 and for only the third time on record.

Colliers added that preliminary data for April suggests that the market came to a complete standstill at the start of the second quarter, although Kan Am has reportedly completed its acquisition of 4 North, at North St Andrew Street in Edinburgh.

Furthermore, some assets are currently under offer, including the forward funding of an Amazon distribution facility at Glasgow Business Park, plus high-profile office and hotel asset in Edinburgh totalling circa £140m.

Patrick Ford, director of national capital markets at Colliers in Glasgow, said: “The weight of global capital has been on an upward trajectory over the past decade and although the Covid-19 impact will depress the total volume invested in 2020, we expect there to a significant upturn in activity when the UK gets back to some normality. Looking at who is going to be selling, it’s not like the global financial crisis, as there’s currently no distress in the market, although that could change.”