According to the latest figures from Knight Frank, recent investments into industrial property, office and retail space have now led Scotland’s commercial property sector to have one of its most active years yet, with £2.5 billion worth of investment.
Outperforming the five-year average, UK funds increased Scotland’s investments by 58%, jumping from £487 million to a total of £771 million. This was a substantial 255% rise on the low of 2016 (£217 million). Investors from overseas were the most prolific purchasers in Scotland, accounting for 36.8% (or £920m) of the total figure.
£897 million spent on offices in Aberdeen, Edinburgh and Glasgow
Around two-fifths, (£1 billion), was invested in offices around Scotland – with Aberdeen, Edinburgh and Glasgow accounting for £897 million of the money. Retail investment, on the other hand, fell from £665 million in 2017 to £550 million in 2018, reflecting similar trends seen throughout the UK.
Glasgow offices hit its highest level of investment in more than a decade at £468 million. This was down to large development deals at Finnieston’s Skypark campus, the acquisition of Atlantic Square on the Broomielaw, and Legal & General’s purchase of Atlantic Quay 3 for £50 million.
The Aberdeen investment market also saw £145 million worth of investment in 2018, however, this was predominately made up of one large sale; the £114 million deal for Aker Campus at Dyce.
Further research from Savills found Edinburgh’s office take-up was 950,000 sq ft in 2018. Some of the key deals included Baillie Gifford pre-letting 60,000 sq ft at the Mint Building and Royal London leasing the entire 47,000 sq ft of 22 Haymarket Yards. Despite last year's total being 18 per cent higher than their ten-year average, the figure indicated a slight drop compared with the previous year, when take-up in Edinburgh exceeded 1.04 million sq ft.
Head of Scotland Commercial at Knight Frank, Alasdair Steele, concluded:
“It was a solid year for Scotland as we saw UK funds return to the market and overseas investors maintain their high level of interest.”