Investment in Scottish commercial property proved highly resilient last year, closing in on the £2 billion mark despite 12 months of uncertainty, according to new research from Knight Frank.
The independent commercial property consultancy’s analysis of Real Capital Analytics’ (RCA) data found investment volumes reached £1.96bn in the final stages of the year, with several more deals close to completion. That was almost exactly in line with the £1.97bn average for the previous five years.
Retail was the top-performing sector, attracting £717 million of investment. Deals included the sale of Braehead Shopping Centre for a reported £220m, along with retail parks such as Rose Street Retail Park in Inverness, Dundee’s Gallagher Retail Park, and Waterfront Retail Park in Greenock.
Offices were the next best performer at £461m. Among the largest transactions were the sales of Edinburgh’s Quartermile One to BauMont Real Estate Capital, a portfolio of assets at Kingshill Office Park in Aberdeen, and The Sentinel in Glasgow.
After a strong start first half – and building on being the most active sector during 2024, with £588m-worth of deals – hotel investment slowed, only adding another £8.5m in the final quarter to reach a total of £322m for 2025. Meanwhile, industrials attracted £367m of investment, marking its second lowest level since 2020, as more investors decided to hold onto their assets and take returns.
Frasers Group’s purchase of Braehead Shopping Centre, Waterfront Retail Park, and Rose Street Retail Park saw a surge in the share of investment accounted for by occupiers – rising from an average of 2% between 2020 and 2024 to 13% this year. International investors accounted for their lowest proportion of volumes since the pandemic at 41%, while private investors remained active with a 25% share.
Alasdair Steele, head of Scotland commercial at Knight Frank, said: “There have been a lot of challenges in the past 12 months, but Scotland’s commercial property market has shown its resilience once again. While we have just about hit the £2bn mark, there are several deals that were close to concluding that will now fall into 2026, after a flurry of activity in November and December.
“While the optimism that last year began with dissipated in the face of global trade tensions, geopolitical issues, interest rates remaining higher for longer, and the long shadow cast in the build up to November’s Budget, there is a sense of momentum for 2026. More investors are coming to the conclusion that they need to press ahead with their business plans – and we began to saw early evidence of that at the end of 2025.”
He added: “Deals like Quartermile One showed there are still new entrants looking at Scotland, and the smaller share of the market taken by international buyers demonstrates that there is a diverse set of potential buyers for the right assets. All being equal, that should only be added to if and when tax reform encourages more UK pooled pension funds to invest north of the border.
“For 2026, we expect the momentum Aberdeen saw last year to continue, with buyers and sellers more able to meet on pricing expectations than in other markets. We also anticipate investors remaining focused on quality assets located in prime areas, while offices could prove a more attractive proposition, with so little new stock coming through and occupier markets remaining robust at the top end.”
