The total value of property transacted plunged to £1.2 billion last year from more than £2bn in 2019, due to the Covid crisis
Investment in Scottish commercial property sharply declined amid “unprecedented” conditions in 2020, new figures show.
The total value of property transacted sank to £1.2 billion last year from more than £2bn in 2019, as the fallout from the coronavirus pandemic imposed “many barriers” to deals being done. The crisis sparked a “flight to quality stock and the rise of the industrial and logistics sector” amid the rapid growth of online delivery activity, according to analysis from property firm Knight Frank.
Investment in office deals plunged to £347 million from £759m in 2019.
However, the agent flagged its expectation that the market will rebound as the roll-out of coronavirus vaccines gathers pace.
While lockdown and economic uncertainty curbed deal-making in 2020, Knight Frank declared that the Scottish market had shown “resilience” during the year. It noted that Scotland proved to be the most popular destination for overseas investment in the UK outside London and the south-east.
International buyers accounted for £654 million or 52 per cent of the total deal value in Scotland last year. Amazon’s giant fulfilment centre in Dunfermline was acquired by a Korean investor for £65m in Scotland’s largest-ever logistics deal, while Apache Capital Partners and Harrison Street funded the Springside build-to-rent in Edinburgh for £215m.
Other noteworthy deals saw German fund Kan-Am buy Edinburgh’s Quartermile 3 for around £45m, and Singapore-based Elite Partners acquire 150 Broomielaw in Glasgow for £40m.
Alistair Steele, head of Scotland commercial at Knight Frank, said: Given the unprecedented nature of 2020 and the many barriers that emerged to making deals happen, last year’s investment volumes in Scotland proved resilient. A number of trends took hold relatively early during the pandemic and were borne out as it evolved, namely a flight to quality stock and the rise of the industrial and logistics sector, which you can see in the major Scottish deals concluded last year.
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