Aberdeen’s retail property market has shrugged off the slump in the oil price to outshine other Scottish cities when it comes to returns on investment.
Figures from property consultancy CBRE’s quarterly report yesterday showed that retail property in the Granite City delivered a rate of return of 12.7% over the past year, outstripping a 10% return in Edinburgh and 8% from Glasgow.
But there may be more to the statistics than meets the eye.
Andrew Turnbull, a senior lecturer who specialises in retail at Robert Gordon University’s Aberdeen Business School, said: “My suspicion is that Aberdeen has lagged behind and continues to lag behind other centres of retail in Scotland – it’s never really had sufficient opportunities for retails.
“I think it’s a combination of lack of provision relative to other retail centres and also the lack of availability of appropriate land.”
Still, Mr Turnbull said the “obviously well-documented problems” with oil prices were not deterring investors.
He added: “Oil and gas is not going to go away, even if it’s struggling temporarily because of what the oil cartels are imposing at the moment.”
Highlighting differences in the attractiveness – from a retailer’s perspective – of Union Square and other shopping centres or Union Street, he said: “It’s a style of shopping that’s being sort after.
“It’s not a question of whether you can get retail space, it’s a question of can you get good retail space. So there’s a premium on, for example, the likes of Union Square and the St Nicholas and Bon Accord Centre.
“Edge of town shopping is still very successful as well, which reflects the amount of construction and housing being built just outwith the city.”
Aberdeen was the star performer in an otherwise subdued Scottish retail property market, according to CBRE.
Scotland as a whole posted a quarterly return of just 1.9% in the three months to 30 June, edging up from 1.6% in the first quarter.
Despite Aberdeen shining, retail lagged behind the office and industrial parts of the Scottish commercial property market.
Investment returns for office and industrial were up by 2.8% and 3.5% respectively during the quarter.
Aberdeen’s office sector was the worst performer in Scotland, hit by the slump in oil prices as energy companies downsized.