This month, we are looking at the differences in demand* & supply** across the property sectors in Scotland. We have spoken to 3 property agents to see how our statistics relate to their experience and also to get their insight into the reasons behind the differences.
Lack of Demand for Offices
For office property, our findings show that there is a significant lack of demand compared to supply. Eric Thomson of Thomson Property Consultants confirms these findings, stating that in the secondary office market in Glasgow, there is significant availability in the range of 2,000-4,000 sq ft against a limited demand from occupiers. Eric added that for tenants seeking space in the City Centre, there are a wide variety of options available. Graham Wiseman of Stelmain agreed that demand for office property has been patchy & very up and down.
Perhaps this is reflecting a change in the market, with more people work from home or choosing serviced office space rather than taking on the commitment of a lease. Many companies are choosing to visit clients, rent meeting rooms as required or meet up in cafes and restaurants, meaning there is less incentive to take on an expensive city centre office. Thomson also pointed out that there is more demand for offices than as shown in our statistics, as many of the larger occupier requirements are agent led rather than through search engine platforms
High Demand for Industrial
For industrial property, there appears to be a greater demand compared to supply, suggesting that there is a lack of industrial property in Scotland. Eric Thomson confirmed the lack of availability of good quality industrial stock.
Again this could be due to changes in the way people work. Perhaps those that would have traditionally taken up offices are moving in some cases to cheaper industrial property. Combined with a lack of speculative building in recent years, this could have led to the gap between supply and demand. The lack of supply is therefore driving rents up, particularly for smaller units.
High demand for retail in some locations with others struggling
According to our statistics, there appears to be a significant lack of supply of retail property, compared to demand. Eric Thomson commented that most of the enquiries they receive are for small units in out of town suburban areas, they’ve had more than 40 enquiries for one such unit.
Some suburbs in Scotland, however, are suffering from the move of customers, first to shopping centres and then to out of town retail.Graham Wiseman stated that out of town retail parks have had an impact on some suburbs, further noting how some historic roads policies, diverting people away from traditional town centres, have also not helped
How do these statistics compare to last year? Have a read of our 2017 analysis here!
Many thanks to our contributors – if you have any comments you would like to add about the situation of commercial property in Scotland or other please contact firstname.lastname@example.org.
* Demand is calculated as the difference between the number of Scottish property listings on NovaLoca within all of the different sectors.
**Supply is calculated as the proportion of email enquiries so far this year.