FOREIGN investors are poised to pounce on commercial property in Scotland when the dust settles after the UK political storm, it is claimed.

It is claimed “a wall of money” is building up as investors await a less turbulent backdrop.

Overseas investment, which has seen significant investment Scotland from backers in Korea and the US, is expected to accelerate in significant commercial property assets.

It is now claimed overseas investors are set to swoop once the political and economic turmoil is quelled to invest on a larger scale.

South Korean investors clinched a clutch stand-out deals this year including the Leonardo Innovation Hub at Edinburgh’s Crewe Toll which was sold for £100 million, a building used by the NHS at Gyle Square which change hands for £55m, and the sale of Glasgow’s 110 St Vincent Street, occupied by Bank of Scotland.

The Edinburgh Andrew Square home to investment giant Standard Life Aberdeen was acquired by KanAm, one of Germany’s largest pension funds, for £124m.

READ MORE: M&G suspends £2.5bn property fund amid Brexit tension 

In Aberdeen, HFD Property Group agreed to sell its office development to New York-headquartered LCN Capital Partners for about £80m in November, in the city’s largest deal of the year.

The 216,000 sq ft office was pre-let to Wood and the oil services giant will continue to lease the property.

John Rae, of property agent Knight Frank, said: “We believe there’s actually a wall of money building up that is looking at the UK just waiting for that little bit of stability to come back into the market and we expect to see quite a large chunk of money coming back to the UK. Also, the Middle East funds, the Koreans, have all been pretty active in the UK. We’ve just seen quite a lot of American private equity coming back, looking at the UK again as well, which would be interesting.

“They are coming back with lower return hurdles than they’ve had in the past. Which will allow them to maybe buy more prime, more core plus assets, rather than the risky, value add stuff that they looked at in the past.”

However, he said availability will continue to provide challenges in 2020.

READ MORE: Scottish commercial property sector set for record

He said: “In the development side, both Glasgow and Edinburgh are, in terms of the office markets, there’s still not enough good quality space coming out of the ground.

“Pretty much everything that’s coming out of the ground is more or less pre-let. So, you might see some cranes about the city, but it’s actually not going to cure the stock problem because they’re all pretty much spoken for already.

“People are trying to find sites.

“Obviously Haymarket has been a long time coming out of the ground and because it takes so long, most of it’s going to be pre-let.

“So it’s developers trying to find that next quarter within the city where they can get things through out of the ground.”

He also said planning restrictions could result on Scotland losing large construction contracts.

“It’s difficult. The planners have got a role in it as well in terms of freeing up sites and maybe streamlining the process a little bit, and letting people go on building it because a lot of the clients that are out there could potentially be transient as well. So if we can’t provide it, they could well end up in Manchester or Birmingham which as a country we wouldn’t want to see.”

READ MORE: First look: Inside Glasgow's largest office block

On referenda, he said: “We’ve been through the independence referendum before, and there’s a lot of noise being made around Brexit and the potential of a second one.

“Which again, we all know that things slowed down considerably round about 2014 so if we go down that route, it wouldn’t be outlandish to think that things would slow down in Scotland again.

“I think Brexit itself, the whole country’s involved in it. We’re all in the same boat. Might not be a great boat, but we’re all in it together and it affects us all.”

He added: “The occupational markets are still going very well, which is good, but naturally things slowed towards the election.

“I think we’ll all expect to see, going into January, a bit of a bounce in terms of demand.”

Stephen Lewis, managing director of Bellshill-based HFD Property, said that “2019 has been a very good year for us both in Glasgow and elsewhere”.

HFD’s 177 Bothwell Street reached a milestone when it’s core was completed at what will be the largest single office building in Glasgow when completed in 2021 with 313,116 sq ft of office space.

Virgin Money, formerly CYBG, has signed a 22-year lease for more than 116,000 sq ft at the building, which is around 40 per cent of the offering.

It is part of the Bothwell Exchange, a full city block in Glasgow city centre consisting of two high-quality office developments, including 122 Waterloo Street, which was pre-let to Morgan Stanley.

Mr Lewis said: “We recently disposed of our Wood Group building in Aberdeen, which we finished way back in 2016, which is great and that allows us to then recycle some of that capital into other projects.

“We are still very confident that - notwithstanding what 2020 might bring - about the Glasgow and Scottish market. We will continue to invest in new projects.

“In terms of looking forward and what 2020 might hold, the commercial property market’s inextricably linked to the wider economy.

“I think financial services will still play a very important and strong role. Where Glasgow is excelling in this now and it’s a larger sphere, is wider innovation, and that is fintech. If you look at financial services, the subset there will be fintech and Glasgow’s strong on that.”