Developing & Investing in Scotland

Transcription

1 Developing & Investing in Scotland Richard Yorke 18 th May 2018

2 The Market Regained Momentum in 2017 Annual Commercial Property Investment in Scotland Investment ( bn) % Year Average = 1.9bn % Q1 Q2 Q3 Q4 As of Q

3 2018 Started Strongly in Scotland Q Commercial Property Investment by Region 3

4 Overseas Investors Dominate, UK Institutions Re-emerge Rolling Annual Net Investment by Investor Type 1,500 Rolling Annual Net Investment ( m) 1, ,000 Q1 12 Q3 12 Q1 13 Q3 13 Q1 14 Q3 14 Q1 15 Q3 15 Q1 16 Q3 16 Q1 17 Q3 17 Q1 18 UK Institution Fund Overseas Investor 4

5 Middle/Far Eastern Investment Surged in 2017 Investment by Purchaser Nationality (All Sectors, Scotland) 1,200 1,000 Investment ( m) +56% % +4% +227% Foreign Investment W European Investment American Investment Middle/Far Eastern Investment 5-Year Average 2017 As of Q

6 Middle/Far Eastern Appetite Remained Strong in Q Key Middle/Far Eastern Purchases in Q Caledonian Hotel, Edinburgh 122 Waterloo Street, Glasgow West Campus, Aberdeen Sector: Hotel Buyer: Twenty14 Holdings Seller: Shilling Real Estate Sector: Office Buyer: Mirae Asset Global Seller: HFD Group Sector: Office Buyer: Gulf Islamic Investments Seller: M&G Real Estate 6

7 Investors Targeting Offices and Alternatives Scotland Investment by Sector (% of Total) 7

8 1.3 Billion Invested in Office Sector During Last Four Quarters Rolling Annual Investment in Scotland Offices Rolling Annual Investment ( m) 725m 361m 219m 0 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Edinburgh Glasgow Aberdeen 8

9 Scotland s Office Fundamentals in Good Shape Absorption, Deliveries & Vacancy Rate in Scottish Offices As of 14 th May

10 Recent Spec Completions Popular in Glasgow & Edinburgh Recent & Forthcoming Speculative Office Developments Building Size and Leasing Volume (SF) Recently Completed Under Construction / On-site N.B. Light blue bar indicates percent leased 10

11 Scotland Offers Investors Value Over London and Rest of UK Average Transaction Yield by Sector (Scotland, London, UK) 9.0% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% Average Yield (%) Office Industrial Retail Office Industrial Retail Office Industrial Retail Scotland London Rest of UK Last 4 Quarters Q Q

12 Investment in Alternatives Has Surged Across the UK Alternative Investment by Region (Last 4 Quarters Vs 5-Year Average) Caledonian Hotel, Edinburgh EcoCampus, Hamilton 3 Pittodrie Street, Aberdeen Sector: Hotel Quarter: Q Buyer: Twenty14 Holdings Sector: University Quarter: Q Buyer: Aviva Investors Sector: Student Acc. Quarter: Q Buyer: Institutional Investor 12

13 But Gap Remains Between Scotland and UK for Build-to-Rent BPF Build-to-Rent Map & Regional Share of Build-to-Rent Stock Regional Share of UK Build-to-Rent Stock Source: BPF, Glenigan, Molior 13

14 Positive Signs in Scotland s Housing Market Annual Change in Rents and House Prices Source: HM Land Registry, Registers of Scotland, ONS As of February

15 Huge Potential Upside in UK Multi-Family Sector UK vs US Investment by Sector (2017) 140 Investment ( bn) % 17% 15% 2% Office Retail Industrial Multi-Family UK US As of Q

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