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Retail investment drives Scottish capital markets as lack of supply hits offices and industrial

23 05 22 Retail investment drives Scottish capital markets hero

Overseas investors account for 60 per cent of all activity

Quarterly investment volumes into Scottish commercial real estate reached £460 million in Q1 2022, up from £380 million a year ago according to Colliers’ latest Scottish Snapshot. At £140 million, retail investment accounted for 30 per cent of all activity by value.

Despite investment volumes being 20 per cent below the five-year average of £570 million, the country attracted a significant amount of overseas investment with cross border capital accounting for more than 60 per cent of all activity, one of the largest shares on record.

Looking at the major cities, Aberdeen attracted £160 million of investment in Q1, considerably higher than the average of £40 million, while £150 million was transacted in Edinburgh. Activity was limited in Glasgow. The largest deal of the quarter was Kennedy Wilson’s £78 million purchase of Edinburgh’s Waverley Gate.

Oliver Kolodseike, director in the Research & Economics team at Colliers, comments: “Comparing the first quarter of the year to the same period in 2021 gives us a clear indication of how well the market has recovered. One of the most interesting trends is the resurgence of overseas investors who have been particularly active in the retail sector over the past 12 months, investing almost £400m in total.”

Around £140 million was invested in the retail sector in Q1, an improvement on the £40 million transacted during Q1 2021 when the UK was in lockdown. Retail warehouses traded particularly well and the £105 million transacted in Q1 is 74 per cent above the five-year quarterly average of £60 million. The largest transaction was Realty Income’s purchase of the 225,000 sq ft Beach Boulevard retail park in Aberdeen for £60 million.

After annual investment sales volumes in the office sector improved slightly from 2020’s nine-year low of £380 million to £490 million in 2021, activity was subdued in Q1 2022, with only one significant transaction recorded; Edinburgh’s Waverley Gate by Kennedy Wilson. LXI REIT signed a forward-funding deal for BT’s new office in Dundee as part of a £57 million portfolio, which also included car storage. 

In the office occupier market, city centre take-up in Glasgow reached just over 90,000 sq ft in Q1 2022, up by 47 per cent on the corresponding 2021 figure. Demand for space in Edinburgh remains strong, with 180,000 sq ft leased in Q1 2022, twice the corresponding 2021 figure. 

Around £90 million was transacted in the industrial sector across nine deals in Q1 2022. This is almost 30 per cent above the five-year quarterly average and an improvement on the £56 million transacted in Q1 2021. Notable deals include ICG Real Estate’s purchase of the 215,700 sq ft Royal Mail sorting warehouse in Edinburgh for £34 million and the sale of the Orbitstates Building in Aberdeen for £15 million.

Q1 2022 take-up of industrial space reached 1.2 million sq ft. This is down by 13 per cent on the corresponding 2021 quarter, with occupiers struggling to satisfy their space requirements amidst a lack of supply. There continues to be a demand/supply imbalance with only 8.8 million sq ft available, equating to a vacancy rate of 3.6 per cent.

View our Scotland Snapshot May 2022

Related Experts

Oliver Kolodseike

Director of Economics and Research

Research and Forecasting

London - West End

Oliver is Head of Economic Research and leads the quarterly UK forecasting process including the publication of Colliers' Real Estate Investment Forecasts (REIF) report. He also  authors the monthly Property Snapshot and, quarterly Scotland Snapshot. Prior to joining Colliers, he worked for the Centre for Economics and Business Research and IHS Markit. Oliver holds a BA in Economics from  Georg-August University Göttingen (Germany) and an MSc in Economics from Exeter University.

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Rebecca Allen

PR Manager

Marketing & Communications

London - West End

I have been working in commercial property communications for almost 10 years  having previously worked at CBRE and most recently Savills.

In my role at Colliers I am responsible for the PR of national capital markets, London agency and capital markets teams and investment property management.

My role includes:

  • Creating and exectuing PR plans for business lines that span press, marketing and digital channels
  • Media monitoring and reporting
  • Journalist relationship building through face to face meetings, phone calls day to day assistance with stories
  • Reputation management of the Colliers brand



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