THE appetite of foreign investors for targeting commercial property in Edinburgh has not been diminished by constitutional uncertainty brought by Brexit and the growing prospect of a second referendum on Scottish independence.
The weakness of sterling since the Brexit vote and a “temporary absence of UK institutional buyers” were flagged by property firm Savills as it reported overseas investors sunk £5.8 billion into UK commercial property outside London in 2016.
The total was down on the £6.1bn invested by overseas players in 2015 but significantly ahead of the £4.1bn originating from foreign investors in 2014.
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Eighty per cent of investment made in Edinburgh came from overseas, as investment in the city’s commercial property market climbed to £426 million – a 10-year high.
Spearheading the overseas charge into Edinburgh was the move by Dutch pension fund APG to acquire a 75 per cent stake in the £1bn St James Quarter hotel, retail, cinema and leisure development in the city centre.
Nick Penny, head of Savills Scotland, said: “Despite Brexit and the uncertainty surround-ing a possible second indep- endence referendum, Edinburgh is a globally acknowledged capital city, a power house and a major tourist destination.
“This, coupled with the available discount in Edinburgh to comparative UK cities south of the Border, and any further discount from the drop in sterling, has seen overseas investors account for 80 per cent of all property investment in Scotland last year.”
Glasgow proved to be less appealing to overseas investors, however, as 28 per cent of the £124m invested in the city last year originated from foreign sources. The amount invested in commercial property in Glasgow slipped from £378m in 2015.