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UNCERTAINTY HURTS T


he UK property market has been difficult for a long time for very


obvious reasons. Interestingly, in Scotland, every so often things feel a little better and positivity and hope takes over. Unfortunately we seem to have a knack of shooting ourselves in the foot just as things start to warm up, a little bit like our football. Whilst in the


Jonathan McManus


investment market we


acknowledge our market will never operate in the same hemisphere as our London cousins in terms of volume of transactions or property values, it would not be unreasonable to hope that we would continue to compete with the larger regional cities in the UK. Intriguingly, some of the recent receipts paid for Grade A office investments in Glasgow and Edinburgh are impressive and show these cities do contain prized assets that look good on the balance sheet and on the buyers websites. The big picture however is a little different with a distinct lack of institutional funds currently chasing such assets and seeming happy to wait until the obvious political agenda slows down. The negativity from many of the


traditional institutions to investing is concerning but is in some ways understandable. Whilst Glasgow and Edinburgh continue to prove attractive and perform well on returns, many of the big traditional players feel that putting tens of millions into our market is a risk at present for a number of reasons. Altering stamp duty rates (LBTT)


making them out of sync with the rest of the UK, is viewed as an irritation. Now adjusting industrial rates liability on vacant units, another potential faux pas. Further open discussion in the press of how Brexit will result in yet another independence vote, just adds further to the mix. All of this is with the backdrop of the oil & gas sector issues, which admittedly is incredibly difficult to predict or control. We need consistency and stability.


We need to stop tinkering with the edges when it comes to our property market. Construction is always a telling sign of a strong economy. Those who have invested on speculative basis in Glasgow in particular such as BAM, Mountgrange/M&G and Abstract have all had impressive success. The speculative developers have


seen impressive results and in Glasgow COMMERCIAL PROPERTY MONTHLY 2016 53


over the last year resulted in high profile lettings and even more impressive rents agreed with the likes of Deloitte, Grant Thornton, Weir Group and KPMG. On a more positive note, in the


investment market the lack of institutional money coming in is paving the way for the propcos and to that end the arrival of many new parties coming to fore that were previously priced out of the market. This will probably continue to be the trend until we work our way through Brexit and any further UK separation chat. As the Grade A office stocks


continue to diminish, we will start to see by Jonathan McManus, Inglis Howie


a scramble again for new office development and in the meantime the hope is that the Grade B supply will benefit. One such development benefitting from the


disparity created between Grade A and Grade B rents is 67 Hope Street, Glasgow whereby in the last six months there has been plentiful interest and shortly half the building will be let. We anticipate this success will continue as occupiers see prime rents go even higher and in turn seek some value. The Scottish market is an interesting place to be


at present and although at the moment some traditional players have stepped away, they will be back. What is for sure is that we need stability and consistency on government matters and legislation that allows our property market to flourish.


67 Hope Street, Glasgow


- Prime Location - Quality Office Space - £15 per sq ft


JOINT AGENTS


www.67hopestreet.com


NOW ONLY


33,649 sq ft remaining


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