Edinburgh and Glasgow’s challenges revealed as property investment rebounds

Quarterly trading volumes in the first quarter were up 260% compared to the first three months of 2021, a period that was significantly impacted by the pandemic, according to the latest quarterly review from Lismore Real Estate Advisors.

At around £630m, volumes are 35% above the five-year average, the first time this has happened in three years, the report notes.

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The top three deals in the first quarter of this year were the £140million sale of Silverburn Shopping Center in Glasgow, the £111million sale of Westway Park in Renfrew by Canmoor to Ares Management and the sale of more than £78m from Waverleygate in Edinburgh to Patrizia. Kennedy Wilson.

The main transactions in the first quarter included the sale for £140 million of the Silverburn shopping center in Glasgow.

Chris Macfarlane, Director of Lismore, said: “Prime retail prices are tightening as investors continue to look for opportunities which should hold prices down in 2022. Opportunistic buyers are seeing value in prime shopping centers order and investor appetite remains for the best re- quality assets at affordable prices.

“Retail warehousing remains in demand, but inventory is limited and competition for the best assets is fierce. High street retail is showing signs of recovery, albeit with slashed prices, providing the opportunity for those willing to dip their toes in the water.

“However, economic pressures, including the cost of living and rising energy prices, are expected to push inflation to a 40-year high of 8.7% by the fourth quarter ago. therefore a potential ripple effect on retail spending.”

Lismore said the distribution/logistics sector continues to attract a “significant weight of capital” with prime Scottish assets “still looking like reasonable value compared to south of the border”.

The United States remains the most active source of foreign capital, particularly targeting retail warehouses and core plus offices. South Korean investors remain the most active sellers for larger assets, mainly on the back of some institutions unable to secure sufficient syndication in their home markets, the latest review notes.

Meanwhile, investor research conducted by Lismore highlights opportunities and challenges for the Edinburgh and Glasgow commercial property markets.

Some 81% of those polled identified workers returning to the office as the key driver of a return to vitality in Scotland’s two major cities, as well as the return of commerce to restaurants, bars and cafes in the centre. city.

When asked about favored sectors, investor research confirmed the traditional view that Edinburgh is strong in the office sector and manufacturing is king in Glasgow.

Around 43% of respondents said manufacturing was their main sector in Glasgow, compared to 33% in Edinburgh, although that result was closer than expected, Lismore said. The Edinburgh office market is the preferred sector for 33% of respondents, with only 7% choosing offices as their first choice in Glasgow.

Graeme Bone, Group Managing Director of Drum Property Group, said: “We remain positive about offices in Glasgow. However, it’s safe to say that everyone in the country is in the wrong office size right now. »

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‘Foreign capital wall’ chases Scottish property assets as volumes surge 24%…

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