The annual value of investment into Scotland’s commercial property sector is at its highest since 2019, a result of strong interest from overseas.
Figures from Knight Frank, the property consultancy, suggest there were £1.66 billion of deals completed in 2022 in spite of the uncertain economic backdrop — marginally up on 2021’s £1.64 billion but still a way off the £2 billion recorded in 2019 or £2.5 billion seen in 2018. The £1.38 billion for 2020 is the lowest figure in the most recent cycle.
Alasdair Steele, head of Scotland commercial at Knight Frank, said: “Investors have had a lot to contend with this year between the conflict in Ukraine, rampant inflation, interest rates rising, bond and stock market volatility, and political developments. Yet despite it all, the commercial property market has continued its upward trajectory from the lows at the outbreak of Covid-19 nearly three years ago.”
Overseas investors made up 52 per cent of the deal total last year: more than £852 million of transactions. That included the £200 million purchase of 177 Bothwell Street in Glasgow by Pontegadea, a Spanish group headed by Zara retail chain founder Amancio Ortega — a record for a Scottish office.
Property companies were responsible for about 35 per cent of the remaining value in Scotland, at £577 million, with the remainder coming from UK institutions, banks, private investors and property occupiers.
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The Bothwell Street sale lifted offices to the top of the asset table at £494 million overall. Industrial, at £309 million, and retail, at £303 million, were next.