Annual investment volumes in Scottish commercial property continued their upward trajectory in 2022, despite macro-economic challenges.
The latest analysis from commercial property consultancy Knight Frank found that £1.66bn worth of deals concluded last year, marginally up on the £1.64bn recorded during 2021 – and the highest since 2019’s £2.02bn.
Year |
Volume (£m) |
2018 |
£2,461.40 |
2019 |
£2,018.57 |
2020 |
£1,382.46 |
2021 |
£1,644.71 |
2022 |
£1,660.83 |
Overseas investors continued to account for the majority of deal activity, with a 52% share of investment volumes during 2022.
The purchase of 177 Bothwell Street in Glasgow by Spanish investment firm Pontegadea was a record office transaction in Scotland, at more than £200m.
Property companies were by far the second most active buyers representing 35%.
Buyer type |
Volume (£m) |
Overseas investors |
£852.16 |
Property companies |
£577.14 |
UK institutions |
£89.30 |
N/A |
£61.04 |
Financial/banks |
£34.40 |
Occupiers |
£24.54 |
Private investors |
£22.25 |
TOTAL |
£1,660.83 |
Nearly £500m of offices were traded, followed by industrials, alternatives and retail, which accounted for around £300m each.
Asset type |
Volume (£m) |
Offices |
£494.23 |
Industrials |
£308.75 |
Retail |
£303.20 |
Alternatives |
£293.89 |
Leisure |
£168.22 |
Mixed use |
£92.55 |
TOTAL |
£1,660.83 |
Glasgow saw the highest investment volumes of Scotland’s three largest cities, at £468m.
Meanwhile, Aberdeen saw £143m worth of deals – the highest amount since 2019, when there were transactions totalling £204m.
City |
Volume (£m) |
Glasgow |
£468.54 |
Edinburgh |
£463.57 |
Aberdeen |
£143.06 |
Alasdair Steele, head of Scotland commercial at Knight Frank, said: “There are always going to be challenges on the horizon, but after a particularly difficult period there are grounds for selective optimism for the year ahead.
“The cost of debt appears to be easing and there is still a deep pool of buyers looking at Scotland, and the wider UK, to invest.
“Aberdeen has been buoyed by the sustained high oil price, while the deal for 177 Bothwell Street underlines Glasgow’s attractiveness, meanwhile Edinburgh’s occupier market dynamics continue to bolster interest in the city.
“Yields in Scotland remain more attractive than many other parts of the UK and continental Europe, giving it an advantage,“ Steele continued, adding: “Liquidity issues are still a challenge for some funds, which will likely mean assets that are typically not on the market may become available for those in a position to buy.
“Similarly, cash purchasers are in a very strong position going into 2023.”
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