A prime piece of Perth’s retail heart has changed hands in a £5.9 million deal — the biggest property transaction in the city since September 2015.
The deal for 111 to 121 High Street was overseen by property consultancy Knight Frank with the premises purchased by a private overseas investor. The selling price reflects a net initial yield of 8%.
The 50,994 sq ft building consists of four storeys and was substantially redeveloped in 2011, making its two units among the highest profile retail outlets on the city’s central thoroughfare.
The current tenants are fashion retailers Next and New Look, which represent 98% of the building’s income.
The deal for the High Street property comes shortly after figures from Knight Frank showed that, in 2016, nearly two-thirds of investment in Scottish commercial property came from international money — £1.17 billion of a total £1.78 billion. A significant proportion of the figure is thought to have been from private investors.
Douglas Binnie, senior capital markets surveyor at Knight Frank, said: “International investors continue to be the main drivers of activity in the Scottish commercial property market.
“While they were previously only looking at prime assets in the central belt, and Aberdeen prior to the downturn, they are now searching beyond for opportunities — particularly where more generous income returns are available.
“An 8% yield represents a significant discount compared to many other parts of the UK outside of London, underlining what Scotland has to offer.
“Although Edinburgh, more than any other location, has been a popular source for overseas investment, we would expect to see more deals conclude beyond the capital in the next few months, as investors chase income in a stubbornly low interest rate environment.”
