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Capital is top city location

Edinburgh tops property investment league

Quartermile 4
Quartermile 4

Edinburgh is the most attractive British location for property investment outside of London, according to new research by Morton Fraser.

The city ranks alongside Bristol and Manchester among the most appealing destinations for investor.

Glasgow, Dundee and Aberdeen did not appeal to the majority of investors, with more rating them an unattractive investment proposition rather than an appealing one.

Rank

City

Attractive (%)

Not attractive (%)

Net Investment Score

1

Edinburgh

52

28

+24

2

Bristol

48

27

+21

3

Manchester

40

37

+4**

4

Leeds

31

42

-11

5

Cardiff

31

45

-14

6

Glasgow

30

46

-16

7

Birmingham

26

47

-21

8

Newcastle

21

50

-29

9

Dundee

17

50

-33

10

Aberdeen

16

56

-40

Aberdeen is rated the least attractive location for property investors. This comes after its energy-dependent economy was hit by falling oil prices, leading to thousands of job losses and the contraction of the oil & gas industry.

David Stewart, commercial real estate partner at Morton Fraser, said: “Unlike Glasgow, there has been little speculative office development in Edinburgh recently. Quartermile 4 is fully pre-let and the other landmark office development on St Andrew Square is to be wholly occupied by Standard Life.

“Quartermile 3, Capital Square and Haymarket are all under way, but there is a real tightening of supply in the face of strong occupier demand in Edinburgh. With large office occupiers already looking to edge-of-town buildings, the good news is that the St James Centre retail re-development is at last underway. It’s not hard to see why Edinburgh currently presents a compelling case for property investors looking to the regions.

“Regional commercial property investment has a lower upfront capital cost but can often return higher yields and longer tenant leases, improving income security. However, those benefits are outweighed by perceived economic risks in most regional cities by potential investors.”

According to Morton Fraser, Leeds, Cardiff and Glasgow will all expect to move into a net positive investment score in the coming year after at least 30 per cent of investors felt they were attractive locations. They have also negotiated city region deals with the UK Government collectively worth at least £3bn.

Mr Stewart added: “Demand for equity stakes in commercial property vehicles has increased in recent years as investors seek value and flexibility in the asset class. City region devolution will play a key role in ensuring investors see regional locations as positive income-generating opportunities.

“That said, experience shows that a good property investment can withstand economic fluctuations and the right opportunities can be found in all these locations.”



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