scotland |
CENTRAL SCOTLAND SPACE RACE T
by Fraser Clearie, Riddell Thoms
he availability of useful large industrial space in Fife and the neighbouring rural M9 corridor has reached the lowest level I can remember in over 30 years in the business.
It may seem dramatic to say it’s a ‘space
race’ as there’s no obvious queue, but that’s not to say demand doesn’t exist from would be owner-occupiers and tenants. Sporadic (and thin) demand is expected outwith city zones and it is often mis- matched to available properties at given points in time. Regrettably, this demand is seldom properly recorded or quantified, at least not in the same manner that CoStar record supply. It’s a race in the sense that useful space is disappearing and not being replaced - albeit at a glacially slow rate!
Fraser Clearie Data
provided by CoStar indicates that only six large industrial properties are currently on the market. Some of these buildings have been on the market for more than five years and could be functionally obsolete, whereas other buildings are more usable, including the 72,000sq.ft of warehousing at Milnathort. New, speculatively built space has been created around Scotland’s cities but the quantity and range is relatively limited. Whilst the local council has ‘development- ready’ sites beside Milnathort, at Kinross, the obstacle of bridging the financial gap (potentially 30%) between build costs and end (market) value is a problematic hurdle for many businesses. So new space for medium to larger businesses is seldom created except at recognised commercial hotspots.
In the past, lengthy marketing for large industrial properties gave time to find suitable occupiers, however the withdrawal of rates relief for long term vacancies means that holding costs are a consideration for sellers. Leading agents agree that removing rates relief prompted owners of large, second-hand industrial
buildings to seriously consider demolition and many do, depleting the stock that might have been adapted to suit future requirements. Often the most likely economically viable use of the land depends on gaining planning permission for residential development.
Whilst residential led regeneration is generally welcomed, it seems counter- intuitive that more direct support is not available to help retain and replace the diminishing stock of aging industrial space. Opportunities to purchase large well- located space for sub-division/renting can be financially rewarding, but suitable properties are rarely available.
The 72,000sq.ft of space at Milnathort that Riddell Thoms are marketing was the distribution hub for Forth Wines (now Inverarity Morton), and part was a secure spirits bond which has tall eaves. The property occupies a level site of approximately 4.5acres overlooking the M9 motorway. It has the potential to be sub- divided to provide a range of smaller units if required and is attractively priced (before VAT) at £850,000, or to let from £1.10 psf rental.
COMMERCIAL PROPERTY MONTHLY 2018
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