The Scottish commercial property market is facing a prosperous year ahead with Edinburgh and Glasgow remaining the focal points for growth.
In a report compiled before the coronavirus outbreak reached the UK, business property advisor Christie & Co said the infrastructure is already in place for a successful year in a number of sectors.
Its Business Outlook 2020: Focus on Business forecasts trends for the year ahead in the sectors in which the business operates.
It said the care sector has “proven resilient when faced with ongoing staffing and funding challenges”.
It continued: “Activity from specialist funds has created competitive tension in the market for future-proof compliant assets and vendors are taking advantage of the best sale prices observed by Christie & Co in over 12 years.”
In child-centric properties “some confidence has returned for investors” following Scottish Government moves to increase the number of childcare hours from August this year.
The hotels sector has started reasonably positively in 2019 but a “heightened sense of caution” emerged in the market because of the Brexit negotiations. Investment has increased as the political landscape became clearer. The report said there were 1,500 additional rooms projected for Glasgow in 2020 – nearly half of the Scottish total.
On retail , Christie & Co said a notable factor of 2019 was increased sales in the petrol filling station market. Companies would be expected to “churn” estates as operational costs rise.
The report said that 2019 was a difficult year for pubs and restaurants with Brexit uncertainty causing some investors to hesitate or delay. A notable development was alcohol sales decreasing in rural areas possibly “underpinned by the introduction of a new drink driving limit.”
Christie & Co said it expected a surge in rural hospitality properties coming to market. It said it expected that casual dining restaurants with the right fundamentals would thrive alongside the booming takeaway market.
The report said that 2019 had been an outstanding year for transactional activity in the pharmacy market with the highest ever witnessed by the Christie team. The firm had done £20 million worth of deals in 2019. It had also been a strong year for the dental market in 2019 with deals up by 22 per cent.
Christie & Co regional director Brian Sheldon said: “Activity across many of our sectors slowed down towards the end of 2019 as political uncertainty led to a tailing off across the hotels and retail sectors.
“However, the care sector remained resilient with activity from specialist funds creating competitive tension, resulting in vendors taking advantage of increased sales prices not witnessed within the last 12 years.
“The day nursery, pubs and restaurants sectors are all confident, although they face similar challenges including increased costs and staffing issues. This has been our best year selling pharmacies in Scotland, with the highest prices we have witnessed, whilst the dental sector saw the continued expansion of medium sized and corporate groups.
“Across all of our sectors there is appetite for well-established and profitable businesses across the country.”
