In light of the rejection of independence north of the border, Simon Morris asks this week; what does a no vote mean for Scottish commercial property?
Current Events Effect Property Prices
Through his role as a commercial property expert, who uses his experience to act in an advisory capacity to UK property investment funds on how to drive revenue on their portfolios, Simon Morris has learned one thing. Current events effect property prices.
That is why there was serious doubt over the fate of the Scottish commercial property market in the run up to the Scottish independence vote last week. Companies threatening to move their headquarters south of the border made many wonder how viable an independent Scotland’s commercial property industry could be, without demand from the UK.
More Confidence Returning to Property Market
Now the nation has voted no to independence, an article in the Scotsman has suggested that commercial property firms are preparing for a new round of activity in Scotland due to the release of demand pent up by the vote. However, it goes on to suggest that some investors may hold back, due to uncertainty over the final nature of the devolution agreement.
Lead director for property consultancy JLL in Scotland, Alasdair Humphery, commented on the issue to the publication. Humphery suggested that “following the result, I am optimistic we’ll see more confidence returning to the market and an increase in activity from international occupiers, some of whom had previously been reluctant to progress expansion plans.”
He went on to talk about the “the constitutional and fiscal changes that will occur if Scotland is granted ‘devo max’ which are at this early stage an unknown quantity.” He then said that “the devil is in the detail, and much of this detail has yet to be worked out,” suggesting it is this uncertainty that could put some investors off Scottish property.
Investors to Move Forward Property Projects in the UK
Meanwhile, the article also explored the effects of the no vote for the wider UK property market. Director of research and forecasting with Colliers International, Walter Boettcher, was quoted by the publication suggesting that the no vote could be good for the entire UK commercial market.
He explained this by saying that “from a narrow business perspective, economic and financial confidence has perhaps regained its balance and this will drive higher levels of activity as pent up demand and projects shelved temporarily will be dusted off and pushed through.”
Wait Until the Details of ‘Devo Max’ Are Known
Simon Morris sees both points as valid. Of course, it is natural that the clearing up of uncertainty in Scotland would promote growth in its commercial property market, as well as the wider UK market. However, Simon would suggest that the smart investor wait to invest in Scotland until the details of any ‘devo max’ agreement are known. After all, as Simon has previously explained, location needs to be chosen carefully, when looking to make profit from property.