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Shortage emerging in capital

Value of office space falls by a third in Q1

City ParkA shortage of commercial property in Edinburgh has contributed to a fall in the value of sales in Scotland in the first quarter of 2015, according to new data.

Figures from the Registers of Scotland (RoS) show that the value of sales fell by a third from £975 million to £615m from the previous quarter. The volume of sales also dropped by a third, from 1,120 transactions in Q4 2014 to 854 in Q1 2015.

Edinburgh in particular experienced a drop in sales, from £417m to £112m quarter on quarter.

Aberdeen defied the fall in the oil price and experienced much stronger quarterly sales, with the total value leaping from £70m in Q4 2014 to £120m in Q1 2015.

The Scottish Property Federation (SPF), which analysed the figures, attributed the fall to a reflection of wider UK economic conditions, and the unpredictability caused by the General Election.

It cited a potential lack of available commercial property stock as the reason for Edinburgh’s relative lack of activity compared to Aberdeen and Glasgow over the quarter, following several significant transactions in the city during 2013 and 2014.

David Melhuish, director of the Scottish Property Federation, said: “This significant drop in sales coincides with a reported slowdown in wider UK economic activity, with the additional unpredictability of an uncertain UK General Election.”

“The drop off in activity in Edinburgh is perhaps the most marked story coming from this quarter and this may well signify a temporary lack of available product on the market having seen a significant number of transactions in the Scottish capital over the past two years.”

Recent figures from DTZ showed a strengthening of demand for Grade A property which had led to an 11% rise in take-up around the country outside London. Glasgow has enjoyed a particularly good start.

But the increase is off a low base and most cities are still suffering from a shortage of availability, said DTZ.

Picture: City Park, Glasgow

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