INVESTMENT in Scotland’s commercial property market has rebounded during the first quarter of 2024, according to analysis from Knight Frank.
The commercial property consultancy’s figures showed total investment volumes rose by 53% on the same period last year, increasing from £251 million to £383 million.
Retail property accounted for 56% of investment volumes, largely because of the sale of Aberdeen’s Union Square for a reported £111 million. Hotels accounted for another 17% and offices represented 15%.
The sale of Union Square also helped Aberdeen record its best first quarter in the last five years, with £140 million of deals. Glasgow saw a strong rebound from last year too, up from £49 million to £109 million – a 123% increase.
So far this year, listed property companies have accounted for 43% of investment, with international investors at 30% – well below their five-year average of 57% – and private capital representing 27%.
Alasdair Steele, head of Scotland commercial at Knight Frank, said, “Last year was challenging for commercial property across the world, with interest rates rising sharply after a decade of historic lows and the economy adjusting to a new normal post-pandemic. While there was some mixed inflation data moving into 2024, a cautious sense of optimism has begun to emerge.
“It is encouraging to see that beginning to be reflected in investment volumes. Although we are not quite back to pre-pandemic levels, there is a noticeable difference between now and this time last year as macro-economic conditions settle, and buyer and seller expectations move closer together.
“The particularly good news is that it looks like there is still plenty more to follow this year – international investors weren’t as active in the first quarter, but are still very interested in Scotland; there are several large office assets on the market; and there is a strong constituency of potential buyers. All things being equal, we are moving in a more positive direction for the year ahead.”
