Scottish commercial property sales fell to their lowest level in over a decade in Q2 (April-June) 2020, according to the Scottish Property Federation (SPF) analysis.
”The latest commercial property sales figures from Registers of Scotland reveals Scotland’s worst quarter for commercial property sales in a decade,” said SPF. ”The quarter was heavily affected by the COVID-19 crisis and Scottish Government restrictions on certain transactions and registrations.”
The total value of commercial property sales stood at £285m in the quarter, a fall of £213m (43%) on the first quarter of the year and down £329m (54%) compared to the same quarter in 2019.
The number of sales also fell to just 525, 611 (54%) fewer than in the same quarter in 2019 and 346 (40%) lower than in the first
quarter of 2020.
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 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:
“The SPF conducted a survey of commercial property owners in May that foreshadowed the extent that the industry would be effected by the pandemic.
“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.
“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.”