Research has revealed strong take-up in the Scottish industrial property market, despite Covid economic challenges, with “significant growth” predicted during 2021.
Real estate advisor CBRE has reported an increase in the price per square foot in prime industrial rents to £8.75 in Glasgow. The largest market in Scotland accounted for approximately 65 of all transactions during 2020, while take-up totalled 3.56m sq ft – up 10% on 2019.
The Edinburgh market totalled 1.17m sq ft in 2020, down 21% on 2019. It was mainly dominated by large heritable (freehold) transactions, accounting for 61% of the total figure.
The Aberdeen market saw activity growth for the fourth year in a row, despite the wider economic challenges as a result of both the pandemic and the oil price drop. Take-up for 2020 totalled 720,780 sq ft, up 1% from 2019.
Small transactions dominated the market, with 41 lettings below 3,000 sq ft and 65 below 10,000 sq ft, however there was also a slight increase in activity in the 30,000 sq ft plus bracket, with noted deals for Amazon and FedEx.
David Reid, associate director at CBRE, said: “2020 was a remarkable year of resilience for the industrial market in Scotland, with a total take-up of 5.45m sq ft, of which we were proud to be involved in over 1.5m sq ft of the transactions during the year.
“Take-up was on par with 2019, however interestingly this was achieved over significantly fewer deals – 320 deals, down from 566 in 2019 – while the average transaction size was up from 9,500 sq ft to over 17,000 sq ft, reflecting occupiers’ drive for larger properties in response to supply chain challenges emanating from the Covid pandemic.”
David added: “In a year of uncertainty surrounding the pandemic, this was a remarkable story, particularly given the lack of quality stock in the market – if the properties to meet the demand had been available the figures would likely have been a lot higher.”
CBRE is expecting larger schemes to start construction within the next 12 to 18 months, with the largest unit being around 50,000 square foot, which could see the trend continue and prices rise.
However, in Edinburgh there is a small number of multi-let schemes under construction and nothing expected to be over 20,000 square foot over the next 12-24 months.
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