By Scott Wright
INVESTORS from the Middle East ploughed £230 million into commercial property deals in Scotland last year amid improving sentiment towards UK assets
outside London, new figures show.
The £67 million acquisition of Abbotsinch Retail Park in Paisley by Ashby Capital was the biggest deal struck by Middle Eastern investors in Scotland in 2019, as more capital from the region was deployed in UK cities outside London for the first time, according to property firm CBRE.
The agent said a total of £880m was placed by Middle Eastern investors across the UK regions last year, compared with £650m in central London.
Other major deals sealed in Scotland last year included the £27m acquisition of Centrica’s headquarters in Edinburgh by BLME/Darin Partners, the £55m purchase of the Sauchiehall Centre in Glasgow by 90 North and Arbah Capital. Black Sands acquired Technip HQ in Aberdeen for £22m.
CBRE director Alistair Wright said investors are drawn to the “dynamics and discount on offer north of the Border”, noting that there has been diversification of Middle East investment from offices into the retail and industrial sectors.
He said: “Having just returned from a series of meetings with key investors from the Middle Eastern region, it is evident that sentiment towards the UK
property market is exceptionally strong.
“While the traditional requirements for defensive stock that offers stable earnings remain, we are seeing an increasing number of parties willing to move up the risk curve to satisfy return requirements.
However, while overseas investment into UK regional cities grew last year, CBRE found that overall investment in the UK from the Middle East plunged to £1.5bn in 2019 from £3.7bn the year before.
Chris Brett, head of EMEA Capital Markets CBRE, said the downturn reflected investors offloading assets in London “as they reached the end of their investment cycles, including 25 Canada Square, Citibank’s HQ.”
Mr Brett added: “This group of investors have long been active in cities outside of London having invested £6bn in the UK regions in the last five years. However, this is the first time regional investment activity has exceeded that in London. Investors are increasingly attracted by the high levels of investment into regional infrastructure and the opportunity to achieve greater yields.”
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