Neptune Energy building sold for undisclosed sum
Overseas investors significantly contributed to a sharp rise in investment in Scottish commercial property in the first half, according to analysis from Knight Frank.
There was a 35% surge in deals to £688 million in the six months to the end of June, against £510m in the same period of 2020 – the height of the UK’s first lockdown.
Overseas investors have remained the biggest buyers of Scottish commercial property so far in 2021, making acquisitions totalling more than £300m.
Privately held property companies were involved in £115m of deals, while UK institutions accounted for another £60m.
According to Knight Frank, investment fell 15% between the first and second quarters of 2021, from £371m to £317m.
However, this does not include deals with undisclosed values, such as the sale of Neptune Energy’s Aberdeen headquarters in May – the biggest investment deal in the city since the pandemic began.
Colliers’ Scotland’s snapshot for the second quarter of 2021 puts second quarter deals higher than the first – at more than £400m – though it says investment was about 20% below the five-year quarterly average of £528m, as the effects of the Covid-19 continue to be felt.
It says investment volumes over the first half were up by more than 50% on the same time in 2020.
Rockstar Games has acquired its Holyrood Road HQ (pic: Terry Murden)
Colliers says the four largest office deals in the second quarter were all recorded in Edinburgh, led by Rockstar Games buying its own building on Holyrood Road – the former headquarters of The Scotsman newspaper – for £31m, and the adjoining Holyrood Park House, home to Citigroup, for £17m.
Knight Franks lists alternatives and mixed-use schemes as the most popular asset classes in terms of investment volumes – including the £80m of funding for Moda’s Holland Park build-to-rent development in Glasgow – followed by offices and industrials.
Both agencies predict that, with a range of high-quality stock still being marketed, a flurry of deals could complete after the summer.
Alasdair Steele, head of Scotland commercial at Knight Frank, said: “Scotland’s commercial property investment market is still recovering from the effects of the pandemic, but there are signs we are heading in the right direction as the economy re-opens.
Oliver Kolodseike, Deputy UK Chief Economist, Research and Forecasting, at Colliers, said: “
“There is pent-up capital waiting to be deployed in Scotland. A number of deals are currently under offer and should complete in the coming weeks and months.
“We expect a further boost with remaining restrictions due to be eased in Scotland on 9 August and we should return to some form of normality.”
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