Commercial property sales hit £1.5bn, up by 20 per cent last year

Almost £1.5 billion of commercial property changed hands last year in investment deals north of the Border, up by a fifth on 2009 but half the level of the pre-recession boom, research has revealed.

The 2010 total of 1.47bn was fuelled by a number of large transactions including the purchase of Dundee's Overgate shopping centre by property giant Land Securities from a Lend Lease venture for 141 million.

Other key deals highlighted in Cushman & Wakefield's Scottish Property Investment Market Review included Swip Property Trust's purchase of the Bridge Hotel and retail development on the Royal Mile, Edinburgh, for 41m, and the 28m sale of Gallagher Retail Park in Linwood.

The number of transactions in Scotland increased from 119 in 2009 to 192 last year, the report noted. Retail led the way, with the sector accounting for 53 per cent of all deals.

According to Cushman's research, institutions were the biggest net investors in 2010.

John Hamilton, a property expert at the firm, said: "2010 has, all things considered, proved to be a remarkably robust year for property investment in Scotland.

"The total does not, however, tell the whole story in that a large number of other properties were offered but did not sell, either because of over-pricing, or as vendors changed their minds, or in the case of some secondary properties because there were no potential buyers."

During the peak years of 2004 to 2007, total property investment deals averaged about 3bn annually. Cushman said that for the UK as a whole, there was a 46 per cent rise in commercial property transactions last year to 34.8bn. A large part of this was driven by the demand for London office investments.

Hamilton said that while this draw had a negative impact on Scotland's office investment market in 2010 that may change if prices continue to rise in the UK capital.