INVESTMENT in Scotland’s commercial property market by overseas investors has risen dramatically since the 2014 independence referendum, while expenditure by UK institutions has dwindled.
Analysis by property firm Knight Frank has highlighted a radical change to the investor mix for commercial real estate in Scotland in the last five years.
READ MORE: Shell eyes North Sea oil and gas developments amid drive to go green
Overseas investors have increased their share of investment in Scottish commercial property to 42.45 per cent from 22.78% since 2014, upping their capital spend to £5.9 billion from £1.6bn in the process, the company found.
However, the share of expenditure by UK institutions has dropped from 44.82% in the run-up to the 2014 referendum to 25.59%.
Underlining the trend, the agent said overseas investors have accounted for 55% of the amount spent on Scottish commercial property so far this year, with UK institutions responsible for 16%.
South Korean investors have clinched three of the sector’s most eye-catching deals this year. These saw the Leonardo Innovation Hub at Edinburgh’s Crewe Toll sold for £100 million, a building let to the NHS at Gyle Square change hands for £55m, and the sale of Glasgow’s 110 St Vincent Street, occupied by Bank of Scotland.
READ MORE: Tories forfeiting right to be taken seriously, says Mike Russell
This year has also seen 4-8 St Andrew Square, home to investment giant Standard Life Aberdeen, acquired by KanAm, one of Germany’s largest pension funds, for £124m.
Alasdair Steele of Knight Frank said the independence referendum of 2014 was a “turning point” for the market. Mr Steele said: “In the build-up to the referendum UK institutions paused for thought, which opened up the market for new buyers.
“Since then, we’ve seen investment come in from across the globe, ranging from Middle Eastern and US funds to, more recently, [South] Korean investors acquiring prime buildings.”
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel