Scotland’s office investment market ‘resilient’ during 2017
Scotland saw a solid level of office property investment in 2017, despite ongoing economic uncertainty, new research indicates.
Knight Frank’s latest UK Regional Cities Office Market Review reveals that investment in Edinburgh and Glasgow topped £864 million, well above the ten-year average. While total investment slipped 8 per cent in Edinburgh, there was a four-fold increase in Glasgow, according to the study.
The number of investments remained at a similar level to 2016, but the value of transactions increased, with 13 deals in Edinburgh and Glasgow worth £25m or more. In Glasgow, 82 per cent of the invest- ment was placed in the final six months of the year.
In Edinburgh, prime office yields came under pressure at the end of the year, in the region of 5 per cent to 5.25 per cent, In contrast, yields in Glasgow remained steady at 5.5 per cent.
Overseas investment accounted for almost half of all transactions in Edinburgh and Glasgow last year despite the return of the UK investor. New grade a office availability fell sharply in 2017, particularly in Glasgow.
Alasdair Steele, head of Scotland commercial at Knight Frank, said: “Overall, the Scottish commercial property market has remained resilient, with investment volumes much higher across Edinburgh than the ten-year average.”