Investment in Edinburgh’s office space during the first half of 2019 has outpaced the equivalent recorded for the full 2018 year, buoyed by the sale of Standard Life Aberdeen’s HQ.
Nearly £310m was invested into the city’s offices during H1, according to the latest findings from Knight Frank. Investors spent more than £290m between April and June.
This compared with the total £284m spent during the whole of 2018.
The H1 figure was boosted by the sale of 4-8 St Andrew Square, home to Standard Life Aberdeen, for £120m to a German pension fund fronted by KanAm Grund Group.
This was followed in June by the £100m purchase of the Leonardo Innovation Hub at Crewe Toll, by a Korean investor.
Earlier in the year, a £55m property at Gyle Square was also acquired by Korean investors.
Alasdair Steele, head of Scotland commercial at Knight Frank, said: “It’s been a great start to the year in Edinburgh, with a number of large transactions for major assets.
“That we had two nine-figure deals conclude against an uncertain political and macro-economic backdrop is testament to the strength and diversity of demand for prime commercial property in the city.
There is an almost insatiable appetite among investors for secure long-dated income and prime offices. Despite Brexit, Scotland is seen as providing stability at a competitive price.”
Knight Frank noted Korean funds have now made four major purchases in Scotland since their first transaction in 2017, including a £48m deal for Glasgow’s 110 St Vincent Street in June this year.
Steele said: “What’s noteworthy about most of the major transactions in Edinburgh is that they are being conducted off market by overseas money. While it might seem counter-intuitive to limit the number of interested parties by seeking out specific buyers, it’s turning out to be the best way of concluding deals.
“The purchasers know they stand a good chance of acquiring the asset and are willing to pay a premium in return.”
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