INVESTMENT into commercial real estate in Scotland this year is expected to be among the highest annual figures in the last decade – exceeding the £2 billion total for 2017 – with signs of a “resurgence” in Glasgow’s office market.

Property consultancy Savills, publishing its latest analysis of commercial property activity north of the Border, observes Glasgow has in 2018 seen a significantly greater share of overall investment into the Scottish office market than in recent years.

Savills’ figures show investment volumes of £1.74 billion have already been transacted this year in the overall Scottish commercial real estate market, with £265 million currently under offer as the start of the fourth quarter approaches.

Commenting on these figures, it said: “Volumes are 90 per cent ahead of the same point in 2017… suggesting the year will be one of the strongest recorded in terms of investment volumes in the last decade.”

Savills noted the office sector accounted for the “lion’s share of activity” so far in 2018, with £746 million transacted in the year to date.

It observed that, in previous years, the majority of office investment had occurred in Edinburgh.

However, its figures show that more than 50% of investment in the Scottish office market this year has been transacted in Glasgow. Savills calculates that £382m has been invested across 16 deals in the Glasgow office market in the year to date. This is up from £134m during the same period of 2017.

Stuart Orr, director in the investment team at Savills in Glasgow, said: “Having lived in the shadow of Edinburgh for many years, research suggests that perhaps we’re seeing the beginning of Glasgow’s resurgence, in particular amongst UK investors who account for 60% of the office deals in Glasgow, by volume, to date.”

Savills highlighted the strength of activity in Scotland’s retail warehousing sector, with £400m invested so far in 2018. Key deals included Fort Kinnaird in Edinburgh, Almondvale South in Livingston and Caledonian Retail Park in Wishaw, it noted.

It added that enthusiasm for Scotland’s industrial assets remained strong - with more than £230m of deals completed across 25 transactions - but cited a lack of supply in this market.

Savills meanwhile flagged a lack of high street retail property deals.

Nick Penny, head of Savills Scotland and director in the investment team, said: “Scotland continues to offer investors, both UK and overseas, attractive opportunities that are perceived as good value in the context of the wider UK investment market.

“While investor demand continues to push down office yields in Edinburgh, there’s growing interest in Glasgow which, with large developments under way, is on the cusp of significant change and investors are buying into this.”