Scotland business

Edinburgh and Glasgow commercial property markets 'positive'

George Square
Image caption The sale of a major development in George Square boosted investment volumes in Glasgow in 2012

Edinburgh and Glasgow's commercial property markets could outperform the UK as a whole this year, according to a new report.

Deloitte Real Estate has forecast "significant" rental market growth in the two cities.

Its UK Key Cities report found that take-up of office space in Glasgow and Edinburgh increased in 2012.

Deloitte said it was the "most positive picture" it had seen in Scotland for some time.

Its report suggested that Edinburgh last year enjoyed its strongest lettings performance in four years.

Rent in the capital also remained at a healthy level.

In Glasgow, year-on-year investment volumes were also up, with completed deals in the city worth a total of £152m.

A large proportion of this total was made up by the sale of One George Square in the heart of the city.

'Strong demand'

Deloitte said strong demand for Grade A space had also led to an increase in development activity in Glasgow.

Two speculative city centre schemes are under way, the first to take place in the city for some time.

This contrasted with the picture in Edinburgh, where no new schemes have been started or finished - the first time this has happened since Deloitte Real Estate began recording development activity in the city 12 years ago.

Alasdair Ramsay, head of Deloitte Real Estate in Scotland, said: "Glasgow is one of the first regions outside of London to see any new development activity, which provides some reason for optimism for the next 12 months.

He added: "Although there are limitations to the extent of market recovery we should expect across Scotland this year, it is the most positive picture we have been able to paint for the region in some time.

"With positive rental growth and the embers of recovery in Glasgow's development market, we could well be looking at an even more positive picture come this time next year."

Meanwhile, research by real estate firm Jones Lang LaSalle suggested an increase in the take-up of prime industrial units in Glasgow and Edinburgh last year.

Both city centre sites and those in key strategic locations saw rents tightening and incentives decreasing, according to the report.

It found take-up in Scotland involving units of 100,000 sq ft was about four times higher than 2011.

Neil Cockburn, from Jones Lang LaSalle, said: "2013 has started positively in terms of enquiries and transactions.

"Prime city centre and key strategic locations around Glasgow and Edinburgh are still seeing an increase in take-up, with rents tightening and incentives decreasing. Aberdeen continues to perform well with the oil and gas, renewables and subsea sectors."

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