Scottish commercial real estate investment activity hit £360m in Q1 2024 – a 44% uplift on activity in Q1 2023, according to Colliers’ latest Scottish snapshot.
Retail investment volumes accounted for more than half of all investment activity for the quarter, hitting £190m – the highest in two years and well above the five-year quarterly average of £114m. Retail yields for Scotland compressed by 21 bps during the quarter, compared with a 2 bps increase for the UK as a whole.
The three largest Q1 transactions recorded in Scotland were all retail deals, led by the £111m sale of Union Square (pictured) in Aberdeen to Lone Star, the £44m sale of Tesco Corstorphine to ICG and the £20m sale of Princess Square in Glasgow to Lothian Pension Fund.
Office investment slowed from £130m in Q4 2023 to £80m in Q1 and industrial investment activity rose slightly from £30m in Q4 to £40m in Q1.
Oliver Kolodseike, director in the research and economics team at Colliers, said: “Despite slowing from a reasonably strong end to 2023, investment into Scottish commercial real estate has had a respectable start to the year, with the retail sector witnessing the highest quarterly total in two years. MSCI data highlights yield compression across the board, contrasting with further slight outward shifts across the UK as a whole. Looking ahead to the rest of the year, we expect investment activity to remain relatively subdued until interest rates are cut and the cost of debt comes down.”
