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Growth of Scottish property returns remains consistent | 29 August 2014

Growth of Scottish property returns remains consistent | 29 August 2014

Scotland’s commercial property sector has recorded increased returns for the fourth quarter in a row.

In its latest Scotland Property Quarterly report, CBRE says total returns reached 3.1 per cent at the end of Q2 2014, compared to 2.8 per cent during the three months previous.

These figures mean that values have risen five per cent over the last 12 months, with average returns standing at 11.8 per cent on June 30, property-magazine.eu reports.

In the report, CBRE said: “Whilst inward yield movement has been the key driver of this growth, Q2 has also seen the emergence of some modest rental value growth. All sectors saw rents increase in Q2, led by offices which experienced growth of 0.7 per c ent over the three months.

“This means that all property ERV [estimated rental value] growth was 0.3 per cent in Q2, the highest rate of growth since 2008.”

Despite the clear improvements, Scotland is still some way behind the rest of the UK, with the report showing that the gap has actually widened. A total return of 16.5 per cent puts the UK 470 basis points ahead of Scotland as an individual market; according to dailyrecord.co.uk, the gap was just 330 points for the first quarter.

Discussing the UK in general, the study’s authors say an improving economic situation is helping to boost returns across the South East, not just in London as has been the case in the past.

The views expressed in this post are those of the author and are not necessarily those of Qube Global Software. All facts are verified where possible directly by the author.

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