Property agent Ryden expects the property market’s habitual summer lull to extend into September as Scotland’s independence referendum continues to dominate the agenda later this year.
But the firm uses the 74th edition of its twice-annual Scottish Property Review to hail the weight of money “swamping” the country’s most attractive markets during the early part of 2014.
“While there is no sign of investment demand weakening, there is potential for the level of activity and volume of transactions to fall over the next sixth months,” the report warns.
“This is partly due to the extremely high volumes of transactions recorded over the last six months which will be difficult to replicate, and also to an anticipated slowdown in the lead up to Scotland’s referendum.”
Ryden said office rentals were “moving upwards” in Dundee, thanks to a lack of prime Grade A space, an improving economy and “new developments in the immediate pipeline”.
It said uptake for smaller serviced space had improved, citing Unicorn’s Dundee One development and the start-up focussed District 10 development by Scottish Enterprise at Seabraes.
The Forth bridgehead in Fife had proven attractive to oil and gas operators thanks to cheaper rents and a shortage of skilled labour in Aberdeen, Ryden said, while Dundee has also experienced good operator demand.
Refurbishment at Perth’s St Catherine’s Retail Park as drawn new tenants, while there have also been new signing’s at the St John’s Shopping Centre, as well as Dundee’s Overgate and Wellgate malls. The former changed hands in a £125.3m deal, while the latter has ambitious redevelopment and cinema plans.
The review also highlights new Scottish Government planning documentation, which it says is being launched into “the most positive development climate for six years”.
Ryden says proposals which encourage economic growth are likely to “carry significant weight” under the news rules, which carry a “presumption in favour of sustainable development”.
The firm also calls developer attention to increased local authority focus on pre-application activity, through consultation and engagement with stakeholders.
It says investment activity in the office sector will likely remain brisk, while attractive yields are also available in the industrial sector but warns that investors’ cash is following retailers by focussing on dominant retail centres.