Acquisitions in the bag, major developments and an expected upturn in Scottish commercial markets before the end of the year are all giving north-east property entrepreneur James Barrack grounds for optimism.
Mr Barrack, managing director of Knight Property Group, is confident demand across the different sectors will start gaining traction soon.
And he believes some companies – faced with the prospect of a growing number of employees giving up working from home from later this year – will quickly start reclaiming office space they were all too keen to get rid of at the height of the pandemic.
Mr Barrack saw his own business, Aberdeen-based Knight, deliver an increase in profits and turnover during the year to December 31 2020.
Accounts lodged at Companies House for the parent, Knight Property Holdings, show bottom-line pre-tax losses of £2.42 million, compared with £10.1m in 2019.
But stripping out the impact of net gains and losses on the revaluation of investment properties, profits rose by around £200,000, from £2.7m, to just over £2.9m.
Turnover rocketed to £39.1m in the latest period, from £7m previously, which Mr Barrack said reflected the company becoming more of a trading business – and not one solely focused on investment and collecting rents.
Recent acquisitions include the 5.2-acre Tyseal base at Aberdeen’s West Tullos Industrial Estate, which Knight snapped up for an undisclosed sum.
Knight hopes that by demolishing the existing “dilapidated” buildings and developing the site it can cash in from firms wanting to move into a busy industrial “hub” close to key oil and gas businesses including Shell, Wood, Weatherford and Baker Hughes.
The project pipeline also includes the redevelopment of Knight’s Kirkhill Business Park in Dyce, Aberdeen. Acquired in November 2019, the site is expected to become home to as many as 11 modern new industrial units.
Meanwhile, Knight is seeking planning consent to create a £50m logistics park in Bellshill, North Lanarkshire. The 14-acre site – previously home to sausage skin-maker Devro – was acquired by the Aberdeen company in February this year and is currently undergoing demolition and clearance works.
Knight – whose past projects include The Capitol office building on Union Street, Aberdeen – is already eyeing further development opportunities, particularly in the central belt, Mr Barrack said.
On prospects for the office market after 16 months of people mostly working from home, he said: “It will be nice to get more people back into offices again. We’ll have to wait a wee bit for now, but I think we’ll see it happening more by the end of the year.
“We are getting a growing number of inquiries related to office space – people are starting to see the end of the pandemic.”
A likely trend for so-called “hybrid” working, with more people working flexibly in the future, will create morse spacious offices, driving new demand in the market, he said.
People are starting to see the end of the pandemic.”
James Barrack, Knight Property Group
Mr Barrack added: “We’ve spent the past 20 years cramming people into offices – but demand for flexible working will change all that. I am very optimistic about the office market.”
Knight’s MD said he was also confident about prospects for the commercial property markets in Aberdeen, where the local economy has been battered by another oil and gas industry downturn as well as Covid-19. “We wouldn’t be continuing to invest in the city otherwise”, he added.
Mr Barrack has for many years put charity at the heart of his business and he revealed the company and its fundraising arm, the Barrack Charitable Trust, donated £200,000 to a variety of good causes last year.