‘Strong’ start to 2022 for Scotland’s investment market

Chris Macfarlane

LISMORE Real Estate Advisors has reported a ‘strong’ start to the year for the Scottish investment market in its quarterly review.

Transaction volumes for Q1 are up 260% compared with the same period in 2021, which was impacted by the pandemic. At circa £630m, volumes are 35% over the five-year average.

The top deals for the quarter were the £140 million sale of Silverburn in Glasgow, the £111 million sale of Westway Park in Renfrew by Canmoor to Ares Management, and Patrizia’s £78.05 million sale of Waverleygate in Edinburgh to Kennedy Wilson.

Chris Macfarlane, director of Lismore, said, “Prime distribution pricing is hardening, with investors continuing to chase opportunities, which is likely to sustain pricing during 2022. Opportunistic buyers are seeing value in prime shopping centres and investor appetite remains for the best re-priced quality assets.

“Retail warehousing remains in demand, but stock is limited and competition for the best assets is fierce. High Street retail shows signs of recovery, albeit with pricing discounted, offering opportunity for those willing to dip their toes in the water. However, economic pressures, including cost of living and rising energy prices are expected to push inflation to a 40 year high of 8.7% by Q4, so there is the potential for a knock on effect filtering through to retail spend.”

Lismore revealed the distribution sector saw the strongest yield compression of 75-100bps over the quarter, with retail warehousing and PBSA are also seeing a ‘sharpening’ of yields.