Key players in Scotland’s commercial property sector will join sponsors, judges and guests at the Edinburgh Corn Exchange tonight as the winners of the Scottish Property Awards are revealed.
The ceremony and fundraising dinner, which is the biggest black tie event in the industry calendar, is now in its fourth year of celebrating developments in commercial property, many of which, according to Savills’ Nick Penny have caught the eye of international investors.
Over the last few years the alternative sectors in the market have grown significantlyNick Penny, Savills
“The trend that we have seen in the last few years was that the UK institutions [such as Standard Life] have been noticeable in their absence in the market, not just in Scotland but in the whole of the UK,” says Penny, who is head of Scotland at Savills.
“Part of that is due to uncertainty around Brexit and around Indyref 2 in Scotland. What has happened though is that the gap that they have left has been filled by overseas money.
“There have been some new entrants to the market including some private money that is based in the Middle East and some Asian money that has come into Scotland.” He says such foreign activity was prevalent prior to the weakening of the pound, and since then investing in sterling has become even more attractive, putting Scotland on the global commercial property map.
Many of the developments currently coming out the ground have pre-lets in place, with a noticeable lack of speculative developments in the pipeline.
“There is not a huge amount going on which, on one side of the coin doesn’t sound great, but on the other side, it means we are not getting ourselves into an oversupply situation,” says Penny.
He points to Glasgow where there is continued demand for new Grade A office space but very little supply. It does, however, have some second hand space which is in the process of being refurbished to be let as Grade A office accommodation.
Seemingly the traditional sectors in the commercial property sphere – offices, retail and industrial – are leaving the door open for alternative developments to take centre stage.
“Over the last few years the alternative sectors in the market have grown significantly,” says Penny.
“There is a view that where some of the traditional sectors have become very competitive or oversupplied, some investors have started to branch out and look at alternatives, which would include hotels, student accommodation, private rented sector and healthcare.”
Penny highlights the rise in student accommodation developments, a sector which will be celebrated at tonight’s awards when the winner of Student Accommodation Development of the Year, sponsored by RSM, is announced.
“There has been quite a lot of student accommodation development full stop over the last few years, not just in Scotland.
“Where you have world-class universities, you will attract a lot of foreign students who are often very well funded and can afford these student digs. Current students seem to be demanding of much nicer accommodation than when I was a student,” adds Penny.
“They want ensuite bathrooms, nice facilities and all the mod cons – and they are willing to pay for it.”
A wide range of commercial developments will be showcased at the ceremony including healthcare and education facilities, public buildings and innovative office space.
After tonight’s dinner, Taiko Drummers will open the awards ceremony, which this year will be presented by BBC Scotland news anchor Catriona Shearer and Scottish comedian and broadcaster Des Clarke.
The audience will also have the opportunity to make a donation to It’s Good 2 Give, the charity which supports children and young people with cancer and their families.
“It was great to see a substantial increase in the volume of entries this year and to have such a wide range of development projects of significance, both large and small coming forward,” says Fiona Morton, chair of the judging panel.
“We welcomed entries from locations across the country from the Highlands and Islands to Scotland’s major cities.
“Team-based categories were also well supported by strong entries reflecting healthy activity in the sector.
“Many thanks are owed to the hard working judging panel who contributed their time and expertise generously to the difficult task of assessing the entries and debating the selection of the finalists.”
This article was produced in partnership with the Scottish Property Awards.