ABERDEEN witnessed its highest level of commercial property investment in the first half of this year since 2018, according to new figures from Knight Frank.
The commercial property consultancy’s analysis of RCA data found £181 million was invested in commercial property in the Granite City during the period – more than double the £78 million recorded in the first six months of 2023 and well above the £99 million average of the past five years.
Lone Star Real Estate Fund’s £111 million purchase of Union Square accounted for the majority of investment, meaning retail accounted for two-thirds (67%) of the six-month total. Industrials was the second most active sector (15%), with hotels just behind (13%).
Investment in Aberdeen accounted for 24% of total investment in Scotland during the first six months of 2024. International investors were the most active buyers, representing 62% of investment volumes.
Alasdair Steele, head of Scotland commercial at Knight Frank, said, “While the uncertainty of when interest rates will be cut has generally slowed deal activity, Aberdeen’s investment market has been comparatively strong – buoyed by the sale of Union Square. The city has also seen a reasonable amount of activity in the industrials and hotels sectors. More generally, market sentiment remains cautiously optimistic and we would hope to see a rise in activity in the next six months both in Aberdeen and across Scotland.”
Matt Park, partner at Knight Frank Aberdeen, added, “The occupier market in Aberdeen has bounced back from the lows of the pandemic era and is settling into a much more consistent level of activity. That is beginning to filter through into the investment market and, although the first half of 2024 may have been skewed by the sale of Union Square, we are seeing much more interest in the other assets that are being put on the market – particularly where there is re-development potential or the opportunity to add value through strong asset management.”
