Commercial property investment activity in Scotland fell to £250m in Q1 2023 – less than half the five-year quarterly average of £550m, according to the latest data from Colliers.
The largest retail deal by value in Q1 was the £30m sale of the Overgate Shopping Centre (pictured) in Dundee to Frasers Group. In the industrial sector investment volumes hit £80m – the best quarter for 12 months and a significant jump on the £30m recorded in Q4 last year.
Office investment volumes remained subdued, dropping from £90m in Q4 to just over £70m – around 65% below the five-year quarterly average.
Oliver Kolodseike, director in the research and economics team at Colliers, said: “2023 began where 2022 ended, with few deals and smaller lot sizes. However, it feels as if we are moving closer towards a turning point, with the Q1 Scottish Business Monitor showing improved sentiment. Since our Q4 snapshot, Oxford Economics has revised its forecasts for Scottish GDP, expecting growth of 0.1% this year, up from the 1% decline previously forecasted.”
Iain Davidson, director in the industrial and logistics team in Scotland at Colliers, added: “In both the occupational and investment markets, we are continuing to see a flight to quality, however the pressure on the levels of stock is impacting volumes. With high costs of construction and borrowing, there is little speculative activity taking place, and as such we don’t see there being a quick fix to help alleviate the pressure on the pipeline.”
