Griffin Webster – Scotland, the ‘booming shed market and buzzing serviced offices’
Greg Dykes, a Director at Griffin Webster Property Consultants spoke to NovaLoca about the current state of the Scottish commercial property market.
“When I started out as a commercial property agent, far too long ago to give a date, factory and warehouse sales and lettings were “an agents graveyard”. It was the unfashionable sector of the property market, low rents therefore low fees and limited demand which was also skewed by subsidised Scottish Development Agency (now Scottish Enterprise) buildings constructed to promote industry. So very few private companies developed warehouse accommodation speculatively.
How things have changed, retail is on its knees, due, in large part by historically high business rates and the advent of well documented internet sales. The office market is still affected with uncertainty as to whether the large scale city centre office block is a thing of the pre-COVID past. On the other hand serviced offices are buzzing, the leases are very short term, there is no liability for common repairs and you are not asked to walk the dog at lunchtime – because you are at your work!
In common with all of the niche agencies Griffin Webster is no longer getting its share of the retail market instructions with two firms picking up the low value end and another two dominating the prime properties, this despite us being able to find buyers or tenants for almost everything we are instructed on within a fortnight. Thankfully we have some industrial and business centre instructions which keep us busy enough.
As for the future, well its an ill wind that blows no good, tenants of poor covenant status – start-ups and one shop operators – are now being offered premises they could only have dreamed of operating from by landlords keen to find anyone who will relieve them of empty rates and perhaps generate some rental income. This will eventually lead to the creation of new multiple retailers of which Scotland seemed to be denuded of over the past 15 years. The planners are at last reviewing their position with change of use on the High Street so we feel investing in retail property at the “right price” is worth a punt.
The problems created by Brexit and COVID in terms of putting up import costs as well as delays with the supply chain should encourage more Scottish manufacturing and help continue the booming shed market. The cost of construction is ever increasing leaving contractors with fixed price contracts in a desperate position and insolvencies are inevitable. This will lead to further price hikes in the short term resulting in the rental values of existing warehouse space going up. Come a national recession however this buoyant market would suffer so our advice is to buy but carefully!
In a nutshell, get a good agent who has been out of college for more than a semester.”
You can view all of Griffin Webster’s commercial property listings on NovaLoca here.