The Scottish investment market is in a ‘state of flux’ a report by Edinburgh-based agency Ryden has said.

The firm’s ‘Scottish Property Review’ said the credit crunch has impacted values bringing them down by 5% to 10% and that there was evidence of a further correction in values to come.

However, it said the slow down may have a positive effect.

‘There are signs of renewed activity as opportunistic property companies and well-funded private/syndicated investors emerge in certain sectors to take advantage of positive rental growth prospects, less competition and more sensible pricing,’ it said.

Office investment was the best performer with total returns of 16% compared to the retail sector’s 6.7% and the industrial sector’s 9%.


On the occupational side the office market performed well with Glasgow leading the way in office space take-up.

In the last six months 560,000 sq ft of office space has been taken up in Glasgow – 170,000 sq ft more than in Edinburgh.

The office market in Aberdeen, because of the city’s role as a centre for oil and gas industries, remains buoyant off the back off the oil market.

Credit crunch

The report also said the industrial sector was holding firm – but said the impact of rising yields following the credit crunch at the same time as rising construction costs was hitting investment in the sector.

Ryden was also positive about the retail market but warned it faced a number of short term challenges including price discounting and new shopping centres starting to trade.

Ryden’s head of consulting Dr Mark Robertson said: ‘Occupier demand for commercial property continues at healthy level, particularly in the office markets and in Aberdeen. Underlying market value is therefore stable but investment pricing is in flux.’