INVESTMENT in Scottish commercial real estate reached a four-year high in the first six months of 2022, boosted by a strong second quarter, figures from Colliers show.
The first-half figure reached £1.3 billion, driven by an active office investment market and interest from cross border capital. The report highlights a particularly strong second quarter in which £700 million was transacted, well above the five-year quarterly average of £550m.
The second quarter was significantly boosted by the sale of Glasgow’s 177 Bothwell Street to Pontegadea Inmobiliaria, which Colliers said was “Scotland’s largest ever office transaction”.
Oliver Kolodseike, director of research and economics at Colliers, said the £215m Bothwell Street office sale was one of a number of large-ticket deals to take place in Scotland, also including the £124m funding and acquisition of Platform Bonnington, a build to rent development in Edinburgh.
“It will be interesting to see how the market fares in the latter half of the year as current signs on the health of the economy are mixed,” said Mr Kolodseike.
READ MORE: Scottish commercial property investment best since 2018
“GDP has held up reasonably well so far this year, but economic forecasts are being downgraded and the PMI’s Future Activity Index fell to its lowest level in almost two years, adding to fears of a slowdown in the coming months.”
Cross-border capital accounted for 61 per cent of all activity by value, one of the largest shares on record.
Meanwhile, office take-up surged in Aberdeen in the first half, buoyed by bumper deals involving major oil and gas operators, figures from Savills show. Take-up across the three largest Scottish cities saw Aberdeen outstrip activity in Edinburgh and Glasgow.
Aberdeen, where office leasing has historically been closely linked to the North Sea energy industry had 256,426 sq ft of take-up in the first six months of this year.
Activity has been bolstered by deals including Shell taking 100,000 sq ft at The Silver Fin Building and the OGA (North Sea Transition Authority) taking 18,000 sq ft at 1 Marischal Square. Glasgow take-up reached 208,023 sq ft while Edinburgh’s ongoing lack of prime space in the city centre led to only 146,377 sq ft of office lettings.
Dan Smith, of Savills, said: "With demand expected to continue on an upward trajectory, 2022 looks likely to see the strongest office letting activity in Aberdeen in eight years."
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