Wealthy overseas buyers are investing in top-end Scottish commercial property at record levels, new figures have revealed.
More than £574 million has been spent by international buyers on £20m-plus properties over the past 13 months, according to analysis by Knight Frank. Deals involving foreign investors included the near-£100m transaction for Edinburgh’s Standard Life House and the £105.5m purchase of the capital’s Port Hamilton building, the home of pension house Scottish Widows.
There were also investments from private individuals into commercial property in Glasgow and Aberdeen, with the £14.1m off-market acquisition of the Ca’d’oro building by Glasgow Central station and the £23.5m deal for the Granite City’s KCA building.
International buyers also snapped up half of Scotland’s 16 rural estates sold in 2015-2016, worth a total of £57.5m, according to Knight Frank’s annual Wealth Report.
Alasdair Steele, who heads the firm’s commercial division in Scotland, said wholesale changes were being seen in the types of buyer interested in the Scottish market. “Historically, UK funds have been the most frequent purchasers of Scottish commercial property, but we’re increasingly seeing private overseas money coming into Scotland. We anticipate the appetite among private international buyers will remain strong,” Steele said.
The figures came on the back of the release of the first full-year’s statistics for returns from the Land and Buildings Transaction Tax, Scotland’s stamp duty replacement, which showed that the Scottish Government raised just over £414m in total.
As the tax moves into its second year, Alasdair Humphery, of property consultancy JLL in Scotland, insisted the current strength of commercial property should not be used to balance out weaker residential receipts. “Instead, steps should be taken to carefully incentivise and encourage inward investment to our cities in order to feel the wider economic benefit,” he said.