“The number of existing tenants that are seeking to move to larger premises is indicative of a level of confidence in the local economy” – Interview with West Lothian Council
This month, we’re focusing our research on Scotland. We spoke to Stephen Letch from West Lothian Council to see how well commercial property is doing in their segment of the central belt. The Council manage and let over 500 offices, industrial and retail properties throughout West Lothian.
How would you rate the overall situation of the commercial property market in Scotland at the moment?
Industrial – demand for smaller industrial units (>3,000 sq. ft.) remains strong and is outstripping supply, and this is reflected in the occupancy levels of our portfolio of 295 industrial units.
Shops – Demand for neighbourhood retail units is weaker than it was 18 months ago, but it is not experiencing the same problems as smaller town centre retail premises. The nature of the neighbourhood parade uses are less at risk to losing business to online retailing. This is reflected in the occupancy stats for our 37 retail units- fairly steady.
Offices – Livingston, as a former new town, has a legacy of a number of office parks, which over the past 10 years has generally had a higher level of voids. The local market is not a real reflection of the strength of certain office markets. Despite Edinburgh being only 18 miles to the west, its strength of demand and rental level growth has yet to ripple out to Livingston.
The council has a small portfolio of 38 office properties, where occupancy levels have been around 94% compared with occupancy for commercial rates (county wide) being around 82%.
Have you seen any trends emerging in the commercial property market in Scotland this year?
The strength of demand in small units servicing sole traders and the number of existing tenants that are seeking to move to larger premises is indicative of a level of confidence in the local economy from which their income is derived. Being close to a relatively buoyant Edinburgh may be a factor contributing to this.
How are the different commercial property type markets doing individually?
Small industrials – strong and robust
Neighbourhood Retail – steady but weak.
Livingston Offices – fragile occupancy levels trending upwards. Still a very poor investors market.