Commercial property investment in Scotland is climbing, but volumes are still 20% below the five-year average.
According to Colliers International, more than £400m was invested during Q2 2021, up from £371m in Q1. However, against the five-year quarterly average of £528m, there is still a way to go.
Colliers pointed to clear signs of recovery, stating that at the half-year mark investment volumes are 50% higher than last year.
Colliers economist Oliver Kolodseike said: “While investment in the second three months of this year was still well below the five-year quarterly average, there are reasons for optimism.”
He added that there was “pent-up capital waiting to be deployed in Scotland”, with a number of deals due to complete in the next month or so, with more to follow as restrictions ease on 9 August.
Just over £100m was invested in the alternative, or mixed-use, sector in Q2. While this was down from the almost £200m for Q1 2020, it was only slightly below the five-year quarterly average of £111m. Offices made up almost half of all investment in Q2, with over £180m invested. This was three times the first-quarter figure of £60m and above the five-year quarterly average of £165m.
Industrial also outperformed, with investment reaching around £70m in Q2, up from Q1’s £52m, and around 10% above the five-year quarterly average of £62m.
But it was retail that tanked the average. While the £60m invested in Q2 was double the Q1 figure, it was less than half the five-year average of £130m.
Colliers also warned that rents in the retail sector will continue to fall as more companies enter administration and shops become obsolete.
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