Business News Round Up (19/07/2022)
H1 Scottish commercial property investment hits pre-pandemic levels
Scottish commercial property has had its best first half of the year for investment volumes since 2018 as the market continued its recovery from the Covid-19 pandemic, according to new analysis from Knight Frank. The independent commercial property consultancy found that £1.2 billion of commercial property deals were agreed between January and June 2022, up 54% on the same period last year. The figure is also 21% ahead of the five-year average – albeit this was skewed by low investment volumes during 2020 and, to a lesser degree, 2021. Overseas investors represented more than two-thirds (68%) of the total investment figure, equivalent to £843 million, with UK property companies the second most active buyers totalling £296 million – 23.9% of overall investment volumes. Investment in retail assets increased by more than 55% on 2021, rising from £148 million to £230 million with retail warehousing accounting for £165 million of the total figure. Offices were the most popular asset class with £410 million-worth of deals, boosted by the sale of HFD Group’s 177 Bothwell Street in Glasgow, in what is believed to be a record transaction for Scotland. Edinburgh saw £400 million of investment, while Glasgow accounted for another £329 million. Deal activity in Aberdeen continued to pick up, reaching £189 million, largely from the sale of two retail warehousing assets.
US businesses’ confidence in the UK decreasing amid EU tensions, new research finds
US companies’ confidence in the UK has fallen due to post-Brexit relations with the EU, concerns about labour shortages and rising corporate taxes, according to a transatlantic commerce group. A survey by the British American Business council, reported in the FT today (18 July), found that the average confidence rating of US companies operating in Britain was at 7.3 out of 10, compared with 7.8 a year ago. Almost 80% of US companies surveyed said improving relations with the EU should among the UK’s top three priorities. Duncan Edwards, chief executive of the council, said: “Concerns over the UK’s fractured relationship with the EU, its future tax competitiveness, and persisting restrictions to labour mobility and access to talent persist, and are the driving force behind this slip in confidence.” The report also found a number of American companies were reporting “ongoing labour shortages”. The news comes amid reports that Starbucks is exploring the sale of its UK business. According to the Times, the company is gauging interest in its 1,000-plus coffee shops, having already sold its South Korean operations earlier this year. The business says Covid, supply chain disruption and increased competition are among the reasons for investigating selling its UK shops. Starbucks said that while it had not initiated a “formal sales process” of its UK business, it continued to “evaluate strategic options”.
Unemployment in Scotland remains low amid spending squeeze
Unemployment in Scotland remained at a low level of 3.5% in the last quarter, according to official figures. That is below the unemployment rate for the UK as a whole, while the number of people in jobs increased by 0.6% to 75.4% of those aged 16 to 64. Across Britain, the number of vacancies between March and May reached a new record of nearly 1.3 million. This has prompted employer groups to urge more flexibility to recruit from overseas. The figures also show pay failing to keep pace with inflation in the last year. Between January and March, the unemployment rate in Scotland was a record low of 3.2%, down 0.9% on the previous quarter. Commenting on the figures, Public Finance Minister Tom Arthur said: “The Scottish economy still shows signs of resilience with the employment rate increasing by 0.6 percentage points over the quarter. “While today’s figures continue to show recovery in Scotland’s labour market, Scotland continues to face economic challenges with the rising cost of living, the continued impact of Brexit and recovery from the effects of the pandemic and the economic consequences of Russia’s illegal invasion of Ukraine.”
https://www.bbc.co.uk/news/uk-scotland-scotland-business-62219643
Surge in home working as heatwave causes severe transport disruption
Millions more people are working from home to avoid severe disruption to transport networks caused by soaring temperatures. Road traffic and public transport usage dropped on Monday after people were urged to avoid unnecessary travel. Network Rail said the number of passengers using major stations across Britain on Monday was around 20% down on a week ago. Location technology firm TomTom said road congestion at 9am was lower in most UK cities than at the same time last week. In Glasgow, congestion levels dropped from 17% to 12%. The figures reflect the proportion of additional time required for journeys, compared with free-flow conditions. Temperatures have soared above 30C in Scotland as the country swelters in a heatwave. The Met Office has issued an amber weather warning of “extreme heat” in eastern, southern, and central parts of Scotland which is in force until midnight on Tuesday. On Monday afternoon, the mercury rose to 31.3C in Aboyne in Aberdeenshire, and Leuchars in Fife, the Met Office said. Meanwhile the Royal Botanic Garden in Edinburgh recorded 30.8C, and the mercury peaked at 29.9C in Aviemore.
https://www.insider.co.uk/news/surge-home-working-heatwave-causes-27515686