Demand for industrial space in Scotland outstripping supply amid sector boom

Industrial remains the standout performer within Scotland’s commercial property sector with record levels of activity and demand outstripping supply in most areas, according to a new report.

Key industrial estates will be developed out over the next 18 months and extensions to existing parks undertaken, but that may be insufficient to meet demand, Ryden’s latest Scottish Property Review suggests.

Demand for development sites also comes from housebuilders looking at large and peripheral locations to satisfy unit sales increases.

Within the major cities, the office property markets in Glasgow and particularly in Edinburgh staged a recovery in 2021, the report notes. Active occupiers are said to be focused on” top quality space” with environmental credentials and future flexibility, to attract staff back into the workplace. This return of life to city centres is also important to retail and leisure occupiers who continue to struggle.

Dundee's Michelin Innovation Parc is among the key industrial property developments north of the Border.

Mark Robertson, Ryden managing partner and Scottish Property Review editor, said: “Economic output appears to be reaching pre-pandemic levels but the societal and economic changes are still being felt through some property market sectors with retail continuing to be hit while logistics reap the benefits.

“The property investment market in Scotland accelerated during the latter half of 2021 as investors re-entered the market, particularly for industrial, city centre trophy offices and retail warehousing.

“The wall of money allocated to property as an asset class is expected to sustain this investment activity through 2022,” he added.

Ryden is headquartered in Scotland with six offices, 43 partners and around 120 staff. The latest report is the firm’s 87th twice-yearly review.

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