THE commercial property market in Glasgow is emerging from the doldrums with millions of pounds worth of investment now piling into good quality office space, according to commentators.
Steven Newlands, a partner in the capital markets division of property consultant Cushman & Wakefield (C&W), said there was a "famine of deals" in the city in the first half of the year but investors were now splashing their cash.
C&W advised Hend
erson Global Investors on a recent deal which saw Kuwati clients snap up a 44,400 sq ft office block on West George Street for £16.1 million from Liverpool Victoria.
Newlands said: "This is one of the first big office deals completed this year. And there are a number of buildings under offer in Glasgow."
He said investors were looking for properties with long-term, secure tenants, such as public sector organisations.
He gave the example of Pentagon House, which houses the Ministry of Defence. It was put on the market at £50m and about 20 bids were received. "That's about £1bn chasing one property," he said.
He explained that UK institutions such as big life companies and pension fund managers were returning to the market. There is also internet interest from investors from across the globe, including Israel, and independent financial advisers are starting to put their clients' money into commercial property funds.
"There's plenty of demand for prime, well-let properties. Security of income is key. Demand is such that there isn't that much prime property left," he said.
Investors are calculating that the UK is close to the bottom of the recession and that now is a good time to buy before the upturn increases values.
This optimistic outlook contrasts with a gloomy report published last month by Ryden which said that Scotland's office market had plunged to a 16-year low.
