The Scottish Property Federation (SPF) said on Tuesday its analysis of the latest commercial property sales figures from Registers of Scotland reveals Scotland’s worst quarter for commercial property sales in a decade.
The SPF said that at £285 million, the total value of commercial property sales for the second quarter (April-June) 2020 dropped 43% on the first quarter of the year and 54% compared to the same period in 2019.
“Q2 activity was heavily affected by the coronavirus crisis and restrictions on property transactions and registrations,” said the SPF.
It said Edinburgh and Glasgow both saw a dramatic decrease in activity during Q2.
Edinburgh recorded the highest value of sales for Scotland with £91 million transacted over the quarter, significantly down on both the previous quarter and Q2 2019, which saw sales of £126 million and £108 million respectively.
Glasgow also saw activity affected heavily by COVID-19, with total sales of £24 million — £148 million (86%) down on the second quarter of last year.
SPF Director David Melhuish said: “The SPF conducted a survey of commercial property owners in May that foreshadowed the extent that the industry would be effected by the pandemic.
“While reduced activity in the commercial property market was expected for this quarter, these figures indicate a much deeper and more rapid fall than we saw even at the time of the financial sector crisis in 2008-09.
“The extent of the fall in sales reveals a weakened wider economy, and consequently a reduced level of investment activity.
“The commercial property sector is facing a perfect storm of loss of income, minimal market activity and increasing liabilities in the form of empty property rates as businesses close stores or delay office moves.
“Unless we see a return to a sustainable level of business activity, the sector will struggle to produce the new buildings and places for a modern workforce, or to provide the quality property investments sought by long-term investors that provide reliable income returns for pension and life funds.”