Quarterly investment volumes into Scottish commercial property reached £460m in the first quarter, up from £380m during the same period a year ago.
Commercial property services group Colliers reported that at £140m, retail investment accounted for 30% of all activity by value.
Despite investment volumes being 20% below the five-year average of £570m, the country attracted a significant amount of overseas investment, with cross border capital accounting for more than 60% of all activity - one of the largest shares on record.
Looking at the major cities, Aberdeen attracted £160m of investment in the first quarter, considerably higher than the average of £40m, while £150m was transacted in Edinburgh. Activity was more limited in Glasgow.
The largest deal of the quarter was Kennedy Wilson’s £78m purchase of Edinburgh’s Waverley Gate.
Retail warehouses traded particularly well and the £105m transacted in the first three months of the year is 74% above the five-year quarterly average of £60m.
The largest transaction was Realty Income’s purchase of the 225,000 sq ft Beach Boulevard retail park in Aberdeen for £60m.
After annual investment sales volumes in the office sector improved slightly from 2020’s nine-year low of £380m to £490m in 2021, activity was subdued in the first quarter 2022, with only one significant transaction recorded; Edinburgh’s Waverley Gate by Kennedy Wilson.
LXI REIT signed a forward-funding deal for BT’s new office in Dundee as part of a £57m portfolio, which also included car storage.
In the office occupier market, city centre take-up in Glasgow reached just over 90,000 sq ft in the first quarter, up by 47% on the corresponding 2021 figure. Demand for space in Edinburgh remains strong, with 180,000 sq ft leased in the first quarter, doubling year-on-year.
Around £90m was transacted in the industrial sector across nine deals in the first quarter - almost 30% above the five-year quarterly average and an improvement on the £56m transacted during the same period last year.
Notable deals include ICG Real Estate’s purchase of the 215,700 sq ft Royal Mail sorting warehouse in Edinburgh for £34m and the sale of the Orbitstates Building in Aberdeen for £15m.
First quarter take-up of industrial space reached 1.2 million sq ft - down by 13% year-on-year, with occupiers struggling to satisfy their space requirements amid a lack of supply.
There continues to be a demand and supply imbalance, according to Colliers, with only 8.8 million sq ft available; equating to a vacancy rate of 3.6%.
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