ALMOST £390 million of Scottish commercial property deals have concluded in the first three months of 2026, despite an increasingly uncertain geopolitical backdrop, according to new research from Knight Frank.
The consultancy’s analysis of Real Capital Analytics (RCA) data found there was £387 million of investment during the first quarter, down 16% on the average since 2020.
Continuing the ‘flight-to-quality’ trend of the past two years, the average deal size reached its second highest point for the first quarter of the decade so far at £16 million, as investors sought safety in high-quality stock and prime locations. That compared to the 2020-2026 average of just over £11 million.
Recent deals have included the sale of The Hanover Buildings on Edinburgh’s Rose Street to the Lothian Pension Fund for £23.4 million, the Bond building on Queen Street in Glasgow for more than £15 million, and Cuckoo Bridge Retail Park in Dumfries for £26.5 million. Retail was the most active sector, with £216 million of investment.
Real estate investment trusts (REITs) and listed property companies accounted for 60% of investment volumes, with private investors accounting for another 25%. International buyers represented just 11% of the market.
Alasdair Steele, head of Scotland commercial at Knight Frank, said, “Uncertainty is always the enemy of transactions and that’s been reflected in what we’ve seen in the first quarter of 2026. While the year began with optimism, the conflict in the Middle East has undoubtedly had an impact on the market, with investors delaying decisions as they gauge the implications of higher energy prices, shipping disruption, and wider geopolitical risk.”
Mr Steele added that deals are still being done – particularly at the higher end of the market.
“Activity is increasingly focused on prime assets, with a good level of demand for properties offering strong fundamentals, value potential, or opportunities to drive performance through active management.
“Edinburgh and Glasgow continue to show resilient market fundamentals, especially for prime assets. Aberdeen also offers value for investors who recognise the city’s unique market conditions and are willing to focus on sectors aligned with its energy‑focused economy. How the rest of the year takes shape will be heavily influenced by what happens in the Middle East and the impact that has on inflation, but the Scottish commercial property market has demonstrated its resilience in recent years and will no doubt continue do so.”
