How Edinburgh's commercial property market will shape up post-Covid

More investors are likely to go off-market as Scotland’s commercial property sector attempts to gain traction following the coronavirus lockdown, experts have predicted.

Among the commercial property assets to trade hands in off-market style deals last year was the Leonardo Innovation Hub at Crewe Toll.

The Covid-19 crisis will have a “significant impact” on the market, but it will also see investors increasingly look for off-market deals in 2020, according to property consultancy Knight Frank.

The firm believes that despite the challenges and investment caution brought about by the pandemic, the Scottish property market is in much better shape than it was during the global financial crisis.

Data from the past year shows that deals for £457 million worth of Edinburgh offices – representing 87 per cent of the total value of transactions – were agreed off-market or by a targeted approach. Off-market or targeted deals are transactions completed privately between a buyer and seller, rather than advertised openly.

Among the assets to trade hands in this way last year in the capital were the Leonardo Innovation Hub at Crewe Toll, 4-8 St Andrew Square – home to fund management giant Aberdeen Standard Investments – and Gyle Square, which is let to NHS Scotland.

Euan Kelly, capital markets partner at Knight Frank Edinburgh, said: “There is no doubt that Covid-19 will have a significant impact on the commercial property market this year. However, while the initial shock of the outbreak took many people by surprise, there are signs of the market beginning to thaw.

“Deals can still happen within government guidelines through video tours and inspections which were conducted prior to lockdown.

“Off-market deals became the norm last year and we expect that trend to continue until the market normalises. Buyers are still looking for quality, well-let buildings.”

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