Perth retail building changes hands in £5.9m deal

Part of Perth's main shopping area has changed hands in a £5.9 million deal with an overseas buyer.

Fashion chains Next and New Look occupy the site on Perth's High Street. Picture: Contributed

The building at 111-121 High Street spans almost 51,000 square feet and consists of four storeys. It was redeveloped in 2011 and the two key current tenants are fashion retailers Next and New Look.

The property has been purchased by a private overseas investor in what is the biggest retail property transaction in Perth since September 2015. The selling price reflects a net initial yield of 8 per cent.

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The deal comes after recent figures from property adviser Knight Frank showed that, last year, nearly two-thirds of investment in Scottish commercial property came from international money – some £1.2 billion of a total of almost £1.8bn. A significant proportion of the figure is thought to have been from private investors.

Douglas Binnie, senior capital markets surveyor at Knight Frank, which was involved in the Perth deal, said: “International investors continue to be the main drivers of activity in the Scottish commercial property market. While they were previously only looking at prime assets in the Central Belt, and Aberdeen prior to the downturn, they are now searching beyond for opportunities – particularly where more generous income returns are available.”

He added: “An 8 per cent yield represents a significant discount compared to many other parts of the UK outside of London, underlining what Scotland has to offer. Although Edinburgh, more than any other location, has been a popular source for overseas investment, we would expect to see more deals conclude beyond the capital in the next few months, as investors chase income in a stubbornly low interest rate environment.”