By Kristy Dorsey
Scotland’s commercial property market is on the “road to recovery”, with investment being driven by industrial and retail warehousing deals.
Overseas investors remained the most active buyers in the first nine months of this year, according to research by property consultancy Knight Frank, when a total of £1.2 billion was spent on commercial assets. That was up 21 per cent on last year but remained adrift of the £1.7bn recorded in the equivalent three quarters prior to the pandemic in 2019.
The volume of industrial property and retail warehousing deals outpaced the equivalent periods in both 2019 and 2020. The industrial sector attracted £259 million of investment in the last nine months, compared to £109m in 2019 and £112m in 2020.
Meanwhile, retail warehousing accounted for £232m, up from £213m in 2019 and £117m in 2020.
READ MORE: West of Scotland industrial estates sold in £4.4m deal
A total of £293m of deals were recorded in the office sector in the first nine months of 2021, up from £240m last year but still well short of the £575m recorded in 2019. Investment in leisure property such as cafes and restaurants was just £27m, marginally up on the £20m registered last year but significantly down on 2019’s £135m.
Alasdair Steele, head of commercial in Scotland for Knight Frank, said the recovery still has “some way to go” but there has been a noticeable upturn in sentiment since the start of the summer, when lockdown restrictions began to ease.
READ MORE: Glasgow leads Scotland's office recovery
“Industrials and retail warehousing have seen the clearest upturn in activity, with investment volumes more or less doubling in both markets,” Mr Steele said. “Prime offices remain in high demand and, although investment volumes in offices are still some way off where they were in 2019, we expect to see more activity in this sector towards the end of the year and into 2022.”
Overseas investors accounted for 42% of all deals in volume terms, and £500m in value. Private property companies represented another £322m.
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