Bullish outlook for Scottish property market

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BUSINESS BULLETIN

A BULLISH outlook has been delivered this morning on the outlook of the commercial property market in Scotland.

Agent Colliers International has declared there is “genuine optimism” in the market in light of the vaccine roll-out and a Brexit deal being struck.

The assessment comes as figures show the value of investment in commercial property plunged to £1.3 billion in 2020 from £2.1bn the year before, amid the fallout from the coronavirus pandemic.

Elliot Cassels, director for national capital markets at Colliers in Edinburgh, said: “There is genuine optimism in the Scottish investment market, in anticipation of restrictions being lifted. A Brexit trade deal that looked very unlikely has been struck, which will calm nervous investors. And with mass vaccinations being rolled out across the UK there is finally light at the end of the Covid tunnel.”

Mr Cassels noted there had been a flow of capital into “beds and sheds” last year, as the residential and logistics markets were among the best placed amid the conditions created by the pandemic.

Colliers said cross border capital accounted for 54 per cent of all activity by value, while the share of institutional investors fell to a record low of 8%, against the five-year average of 19%. 

The two largest deals by value in 2020 were office assets in Edinburgh, with Springside being sold for £215 million and 1-3 Lochside Crescent going for £133.25m.

Edinburgh attracted a total of £606m last year, down from £867 in 2019, while Glasgow accounted for £204m, down from £679m.

Bloomsbury Publishing has issued a profit upgrade, saying it expects sales and profits to beat market expectations thanks to a boost in business during the lockdown and Covid-19 restrictions.

With leisure, entertainment and hospitality venues closing for large parts of the company’s financial year, households have been turning to books in record numbers.

The company has also benefited from the widespread increase in remote learning at academic institutions.

Updating the stock market ahead of its full-year results at the end of February, the company said it is set to beat analysts’ predictions of £161.8m in sales and could be “well ahead” of pre-tax profit expectations of £12.1m.

Bosses said its consumer division continues to perform well, with standout bestsellers including Eat Better Forever by Hugh Fearnley-Whittingstall, Outlawed, Joe Biden – American Dreamer and Humankind.

Car dealership chain Lookers swung to a £50m loss in 2020 as Covid-19 forced its showrooms to close for large parts of the year.

The company said its pre-tax loss followed a profit of £19.6m in 2019.

It was a big hit for the business, which also saw a 40% fall in revenue to a little over £1.6 billion in the financial year, down from £2.6bn a year earlier.

But Lookers signalled that it had seen a more hopeful second half, and expects performance over the last six months to be ahead of 2019, partly offsetting the awful first half.

“Trading in the second half of 2020 was encouraging, underpinned by significant outperformance of the retail UK new car market, continued resilient trading in used and aftersales, and increasing used car margins,” the business said.

It is also set to make some financial gains from a restructuring programme, which included closing 12 showrooms and making 1,500 people redundant.

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