\nScottish commercial property has seen its first quarter of positive capital growth in over two years with capital growth of 1.1% in the third quarter of 2009, according to a new report.\n<\/p>\n
\nIt is going along with the general market trend in the rest of the UK which also saw positive growth with capital values rising 1.5% and total returns of 3.4%, says the report from CB Richard Ellis.\n<\/p>\n
\n\u2018The turnaround comes via an improvement in investor sentiment which has fed through to a general stabilisation of yields,\u2019 it says.\n<\/p>\n
\nBut the report also reveals that so far rental values have not returned to positive growth, although there was a general improvement in the level of falls seen.\n<\/p>\n
\nIn the third quarter ERV\u2019s fell by 0.8%, compared with a fall of 2.1% in the previous quarter.\n<\/p>\n
\n\u2018This is a slowdown and shows that occupier certainty is slowly returning to the markets.\n<\/p>\n
\nOver the past year rental values have fallen by 4.2%, compared with -8.4% at UK level,\u2019 the report adds.\n<\/p>\n
\nRetail was the top performing sector in Scotland with total returns of 3.3% and capital growth of 1.5%.\n<\/p>\n
\nThis was buoyed by a very strong quarter for retail warehouses, as was also seen in the wider UK market.\n<\/p>\n
\nScottish retail warehouse capital value grew by 3.4%, and total returns were up 5.2%.\n<\/p>\n
\nBut High street shops saw only a marginal increase in values of 0.1% and total returns of 1.8%, the report shows.\n<\/p>\n
\nSo on an annual basis, Scottish retail saw returns of -21.6% compared with -18.7% for the UK as a whole.\n<\/p>\n
\nRental declines continued although to a lesser extent, falling just 0.8% in the quarter and 5% year on year.\n<\/p>\n
\nThe report shows that Scottish offices were the weakest performing sector, recording only minor capital growth over the quarter but, importantly, recording a total return of 2.2%.\n<\/p>\n
\nThis was marginally weaker than the UK office market which was influenced by strong Central London market.\n <\/p>\n
\nScottish office yields stayed flat at 9.5% while office rental values continued to outperform the UK market, with rents falling by 1.3% in Scotland, whilst across the
\nUK rents fell by 2.6%.\n<\/p>\n
\nThe industrial sector saw a positive reversal with total returns of 2.7%, although capital values still fell marginally by 0.1%.\n<\/p>\n
\nThe strong return was supported by a relative jump in the income element of total returns, which moved from 1.9% in the second quarter to 2.8% in the third quarter.\n<\/p>\n
\n\u2018Scotland underperformed relative to the wider UK market which saw total returns of 3.5% and capital growth of 1.5%,\u2019 the report continues.\n<\/p>\n
\nRental Values fell by 0.3%, a fall of 0.6% on the same period last year. But the wider UK fared much worse falling by 1.1% in the third quarter and 4.2% over the year.\n<\/p>\n
\n\u2018Investment into Scottish property improved although, unlike the wider property market, the increase was not remarkable.\n<\/p>\n
\nThe lack of investment into Scottish property in 2009 is still sizeable, with the year end figure unlikely to reach even the deflated 2008 figure of around \u00a31 billion.\n<\/p>\n
\nGiven that strong investor activity hasn\u2019t yet returned, there will likely be further yield compression as the weight of investors\u2019 money returns to Scottish property,\u2019 the report concludes.<\/p>\n","protected":false},"excerpt":{"rendered":"
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