Smart & Co: The market is quite interesting in Perth just now…
Doug Smart, Director of Smart & Co discusses the Perth, Scotland commercial property market:
HOW IS 2024 UNFOLDING?
The market is quite interesting in Perth just now…Unlike previous years, we are seeing pretty good activity across all sectors, including offices and retail.
Whilst we have a few deals underway with national multiple retailers, even they are proving to be price sensitive. In some cases, due their ability to escape Business Rates, registered charities are nudging ahead of the competition for certain larger properties.
Industrial deals, which were the golden child of commercial property market over the last few years, have started to level off. Rents are still much higher than just a few years ago – we are now over £8 / sq.ft for prime premises, but the level of enquiries has slowed. As industrial yards are being developed to create more profitable units for lease, those remaining premises which include yard areas are proving to be more desirable. Similarly, units which occupy a reasonably prominent position and either have offices or the ability to create office space are also sought after by technical businesses which are flourishing and wish to increase their presence and general awareness.
Enquiries from businesses seeking Office space are up on previous years. I think this is a result of the blended working regimen arising post Covid as people are being called back to office working. Perthshire has always offered a very attractive home base for families, so having an office in the local area is more convenient, doesn’t necessitate a lengthy commute (so is more sustainable) and will be more cost-effective than renting in the central belt cities.
Developers are primarily focusing on residential, with many older period offices being converted back into flats. Commercial development (roadside, convenience, retail) is facing barriers of the planning system, including NPPF4, but projects are slowly coming through the development pipeline.
WHAT ARE YOUR THOUGHTS / FORECASTS FOR THE FUTURE?
Obviously, this depends on wider economic factors, but assuming things don’t decline drastically under the new Government, I am optimistic about take-up rates continuing along similar levels. Modern office space is in fairly short supply and is fully occupied at present. However, enquiries are not of sufficient volume to secure pre-lets to de-risk a whole building and it would take a strong stomach to build speculatively. Recent and current office development are primarily for and by owner occupiers.
Perth’s geographic position in the centre of Scotland and the connectivity via road network to all parts of the country is a huge advantage and attraction for businesses.
So, in terms of the three fundamentals of any property market: Location, Location, Location – Perth ticks all the boxes. It’s a great place to live and raise a family, with natural beauty and plenty of outdoor pursuits right on the doorstep, so it’s a great place for the workforce to be based. Easy access and great connectivity makes business easy here. Affordable housing and business premises is a win: win for both the business and the workforce. What’s stopping you?
You can see all of the commercial property available from Smart & Co on NovaLoca here.
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