Iain is a Director of Allied Surveyors Scotland plc and opened the firm's east coast commercial agency in April 2018. He has nearly 20 years of experience in the Scottish commercial property market, ranging from private investment and development projects to property agency, asset management and property management.
Bounce in demand is a positive sign
Fears of a slump in demand for commercial property in the aftermath of lockdown appear to be fading, certainly from where I’m sitting.
The last 6 weeks has been an extremely busy period particularly with online enquiries for properties through our various marketing partners. At a time when the school holidays would see a slowdown in market activity, the absolute reverse has happened. Perhaps this is just a post-lockdown bounce created by a build-up of pent up demand, or maybe this is a sign of things to come. I know my colleagues in residential surveying are experiencing something similar with extremely high volumes of single surveys.
I am seeing huge demand for properties in sectors where you may not necessarily expect it. One such example is a new build restaurant and retail unit in Kirkliston’s Main Street which I brought to market on 2nd of July. My client took a little bit of convincing about putting the property on the market in the first place but nearly 20 viewings later, including 8 on one day last week, we have set a closing date for rental offers this Friday.
Similarly, we conducted a viewing and agreed terms on an office in central Edinburgh within a matter of hours of placing the property online. In this instance the company looking to take the accommodation has been forced into expansion as a result of the pandemic. Operating in the care sector, they need additional premises so they can accommodate social distancing in order to provide the services they offer.
And the market received a major boost at the end of last week when news broke of the investment fund manager Baillie Gifford signing up to a 280,000 sq ft pre-let at the long-awaited Haymarket Development. Not only is this a sign of confidence in Edinburgh’s office market, it is also a significant shot in the arm for offices in general in this new era of home or remote working. Offices will still be needed in one guise or another and, in fact, I expect to see demand increase particularly in periphery locations or for business centres.
In retail, meanwhile, we can also report some positive activity. We have terms out on a well-appointed property in Peebles high street, for example, and have fielded numerous enquiries and conducted viewings on properties in Bonnyrigg and Bathgate. Whilst shopping centres and some prime city centre locations are taking a battering, secondary locations remain popular with the usual suspects such as barbers, hairdressers, coffee shops and beauty salons.
And there appears to be no shortage of appetite to spend money either. We are currently acting for an investment buyer in England’s north-west who is willing to spend upwards of £2 million on industrial investments. In addition, I have had several conversations with investors who are liquid and looking to place their money in property at this time. Granted, some of these people are bargain hunters but others are market investors willing to take a long-term view if yields are to move out.
The effects of the coronavirus pandemic are still with us in business and society. The true impact may not be felt for some time to come but this doesn’t seem to be dissuading businesses from seeking out their next property opportunity.