Scotland saw total commercial investment volumes of over £2.2 billion throughout 2019, a 22 per cent increase on the 10-year average. Over half of all investment into Scotland in 2019 was made by international investors, representing the largest share of inward investment on record, apart from 2016 which was skewed by APG’s £750 million investment into the St James’ Centre. American investors accounted for the largest proportion investing £293 million into Scotland over the year, well above the £119 million invested in the 2018.

The Far East invested over £281 million and invested in some of the largest deals in Scotland. Leonardo Innovation Hub was sold to Korean investors for £100 million with a 5.9 per cent yield but the largest deal last year was to German investors who bought 4-8 St Andrew’s Square for £120 million, representing a yield of 4.45 per cent. European investors also continue to invest heavily into Scottish commercial real estate with almost £250 million invested, with offices most in demand.

Investors continue to be attracted by the strong performance of the economy, record employment and more attractive yields on offer relative to other regional cities and the south east. Business confidence is also high. In the occupational markets Banking was the most active sector in Scotland in 2019 accounting for 18 per cent of take-up across four deals, with the TMT sector following very closely behind. With plans set out by the government to position Scotland as a forward-looking digital nation by embracing 5G, Scotland’s global competitiveness will continue to improve and drive inward investment.

We are already experiencing a growth in the tech sector, particularly in Edinburgh, and with digital becoming more engrained in business processes and procedures, having a fast and reliable digital infrastructure will become increasingly vital for businesses.

Demand for prime offices will continue throughout 2020, and we’ve already seen an increase in activity as a result of the post-election reduction in uncertainty and perceived risk. A number of investors who were dormant last year are actively seeking opportunities in the market now, suggesting demand in 2020 will be significantly up from 2019.

Further information

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