Bilfinger GVA report
Rents growing in Scotland’s business parks
Peter Fraser, associate director, the tram has helped stimulate interest and there is now a high percentage of unmet demand for space at Edinburgh Park.
“Following some substantial activity over the past few months, the market has moved from a position of oversupply in West Edinburgh to one of very limited choice for occupiers with just over 50,000 sq ft actively being marketed at Edinburgh Park.
Demand for larger units between 40,000 sq ft and 100,000 sq ft has led to highr rents across the out-of-town market.
In Glasgow demand for larger requirements of between 20,000 and 50,000 sq ft, from the likes of Virgin Money and Balfour Beatty, also suggest a potential resurgence in occupier demand.
Last year, investment in UK business parks was the highest it has been since 2006; amounting to £2.5 billion, up from £2.2 billion in 2014. Overseas investors accounted for 30% of all transactions, while UK property companies and institutional investors both maintained a strong presence, accounting for around 25% of value each.
Mark Beaumont, national head of investment at Bilfinger GVA, says the continued interest remains focused on established business park locations with proven occupational markets such as airports.
“This year, rental growth, rather than yield shift, will be the main contributor to performance. However, while the pace of downward yield movement has slowed, there is the potential for further movement, particularly in the secondary markets with a return of around 7% for 2016 as a whole forecast.”