Savills has highlighted Scotland’s commercial property market as offering investors some of the best opportunities for capital growth in 2016.
Prime commercial yields in England have hardened to an average of 4.63% and it is expected that investors will need to rely on rental growth to get returns, whereas yields for Scottish commercial property are between 70 and 150bps higher than many English cities.
Savills predicts that in the commercial market average total returns on UK property investments are likely to shrink to approximately 7.5% in 2016
Non-domestic investors made 37% of the purchases in the country so far this year and, though this was largely in London and the South East, higher yields and growth prospects in the regions are likely to attract further investor interest from both home and abroad in 2016.
