Worst quarter in 10 years
Real estate sales fall ‘much deeper than expected’
David Melhuish: ‘sales reveal a weakened wider economy’ (pic: Terry Murden)
Scotland has suffered its worst quarter for commercial property sales in a decade, according to figures from Registers of Scotland and released by the Scottish Property Federation.
At £285m, the total value of commercial property sales for Q2 (April-June) 2020 dropped 43% on the first quarter and 54% compared to the same period in 2019.
Q2 activity was heavily affected by the coronavirus crisis and restrictions on property transactions and registrations.
Scotland’s two largest cities, Edinburgh and Glasgow, both saw a dramatic decrease in activity during Q2.
Edinburgh recorded the highest value of sales for Scotland, with £91m transacted over the quarter, significantly down on both the previous quarter and the Q2 2019, which saw sales of £126m and £108m, respectively.
Glasgow also saw activity affected heavily by COVID-19, with total sales of £24m, some £148m (86%) down on the second quarter of last year.
SPF Director David Melhuish commented: “While reduced activity in the commercial property market was expected for this quarter, these figures indicate a much deeper and more rapid fall than we saw even at the time of the financial sector crisis in 2008-09.
Empty offices are not helping the market
“The extent of the fall in sales reveals a weakened wider economy, and consequently a reduced level of investment activity.
“The commercial property sector is facing a perfect storm of loss of income, minimal market activity and increasing liabilities in the form of empty property rates as businesses close stores or delay office moves.
“Unless we see a return to a sustainable level of business activity, the sector will struggle to produce the new buildings and places for a modern workforce, or to provide the quality property investments sought by long-term investors that provide reliable income returns for pension and life funds.”