Commercial property sales surge in post-Referendum Scotland
This figure represents the best quarterly return on commercial property sales in Scotland since 2008 and the onset of the recession.
Glasgow saw a particular surge in sales, from an unusually low quarterly sales figure of £58mn in Q2 to report sales of £242mn in Q3.
The Scottish Property Federation (SPF), which analysed the figures from the Registers of Scotland, says that the resurgence indicates a renewed confidence in the commercial property market now that the political outlook is more stable. A dip in sales in Q2 was attributed to pre-Referendum uncertainty, and the spike in activity between June and September suggests that market activity was considerably more in the last two weeks of September following the vote.
The SPF also pointed out that investors could be rushing to do high value deals taking place before the Stamp Duty Land Tax (SDLT) is replaced by Land and Buildings Transaction Tax (LBTT) at the start of April 2015. It warned that if the tax is seen to be too penal by investors, it could cause the Scottish property market to be perceived negatively by investors. Although the Scottish Government estimates that 95 per cent of transactions will pay the same or less under LBTT than SDLT, the figures show that some £772mn of the £962mn of sales reported was transacted in deals of more than £2m. This equates to 75 per cent of the value of sales in the period which would, by value, be facing higher tax liabilities under LBTT than under SDLT.
David Melhuish, director at the Scottish Property Federation, said: “This latest analysis of commercial property sales in Scotland suggests a very strong bounce-back from any pre-Referendum uncertainties or delays, with the value of commercial property sales in Scotland jumping considerably.
“Confidence appears to be returning to the commercial property market, particularly for high value major investments. It will be important that the introduction of LBTT does not de-rail this recovery in commercial property investment activity and we are concerned that with some three quarters of commercial property sales by value set to see an increase in commercial LBTT from SDLT that this will be viewed negatively by investors.”