Scotland’s property market posts record investment volumes for first nine months
Scotland’s commercial property market has continued to attract investors at home and abroad with record amounts being transacted in the first nine months of 2018, according to new research from JLL.
A total of GBP1.8 billion was invested across all sectors in Scotland in the first three quarters of the year – up 46 per cent compared with the same period in 2017.
Some of the most significant deals of the year to date include the sale of Atlantic Quay in Glasgow, an office block which sold for GBP54.75 million to overseas clients of Darin Partners and Aberdeen Standard Investments purchase of the M8 Industrial Estate in Coatbridge for GBP24.75 million.
Despite ongoing political and economic uncertainty surrounding Brexit, investors still see Scotland as a solid investment opportunity with relative value in comparison to other UK regions, according to JLL.
Chris Macfarlane, Director - Capital Markets, for JLL in Scotland, says: “The renewed momentum we saw across the summer has carried through to the third quarter, and the prospects for a strong finish to the year look encouraging. There has been a better flow of available stock as sellers seek to capture some of the momentum in the market before the year end and the prospect of a more subdued 2019.
“We now have a better balance of overseas investors and UK Institutions who are more active than they have been for a number of years – both see Scotland as offering relative value when compared with other UK regions, and London in particular.”
There have been a number of large and significant deals so far this year including M&G Real Estate buying a 50 per cent share in Fort Kinnaird, Edinburgh for circa GBP125 million, Hermes Real estate buying SkyPark, Glasgow for circa GBP70 million and Hines UK acquiring The Mint Building in Edinburgh for circa GBP50 million.
Macfarlane adds: “The strongest part of the market continues to be long income, index linked opportunities. The demand for pension liability matching product remains insatiable, evidenced by the recent funding of Pentland House in Edinburgh – a student accommodation block let to Edinburgh University for 20 years, at an initial yield of circa 3.75 per cent – a new record low for Scotland.”
“Looking forward, 2018 is likely to be a record year for transactional volumes in Scotland. The uncertainty looming in 2019 will undoubtedly have an effect on the market as investors pause for breath to understand how the market will be affected post Brexit.”