Valuation

Office sector keeps the team busy

A strong upturn in market activity during the latter half of 2013 has kept Savills Valuation Team incredibly busy, particularly in the office sector. Indeed, the sale of several large office investments within Edinburgh has been particularly welcome, especially given that the 2012 market was characterised by the lack of such sales. 

Revaluation, undertaken against the backdrop of debt restructuring has traditionally underpinned our workload.  Whilst this continues to be an important part of our business, the volume of debt restructuring work has slowed during 2013.  Thankfully however, as we outlined in our Financing Property seminars in June, we are witnessing increased new lending activity as debt becomes more freely available for property investments, principally in the prime asset classes. 

We are now being kept busy by a wide range of new funders entering the commercial and residential development sectors, thereby challenging the historical dominance of the traditional UK lenders. 

Looking forward, with yields hardening for the best in class assets, we anticipate an increase in demand for good quality secondary assets. Indeed, there are signs that the yield gap between prime and secondary yields in the UK market is starting to close.  

Our research anticipates that 2014 will see an acceleration of this trend with the investment markets moving ahead of the leasing markets. The faster than expected economic recovery will stimulate a recovery in the leasing markets, and this will in turn lead to a decline in investor risk-aversion and an acceptance of the merits of good quality Grade B property across the UK. We also expect to see a rise in interest in development funding, with lower hurdles for pre-letting as confidence in the leasing markets rises.

 
 

Key contacts

Craig Timney

Craig Timney

Director
Commercial Valuation

Savills Edinburgh

+44 (0) 131 247 3820

+44 (0) 131 247 3820

 

Graeme Fraser

Graeme Fraser

Director
Valuation

Savills Glasgow

+44 (0) 141 222 5866

+44 (0) 141 222 5866