Property experts said the main surprise in the third quarter was a marked improvement for the retail sector, where the total return increased to 1 per cent. It came amid a backdrop of well-publicised woes for the high street.
However, this still leaves the retail sector with the lowest overall return in Q3, behind offices (2.2 per cent), alternative property (2.4 per cent) and industrials (1.9 per cent), according to property adviser CBRE.
The total return across all property classes of 1.7 per cent was a rebound from the 1.4 per cent realised in the second quarter, and is the same rate of return achieved in the opening quarter of the year.
For the third quarter in succession, the annual Scottish all-property total return was virtually unchanged at 7 per cent.
A total of £505 million of stock was transacted in Scotland during the third quarter of the year, down from £578m achieved in Q2. Overall, there has been £1.77bn of spending across the country during the first nine months of the year – a 27 per cent increase compared to the same period in 2017.
The retail sector total was boosted by the sale of Fort Kinnaird retail park, located on the eastern edge of Edinburgh. M&G Real Estate acquired the park for £167.25m from The Crown Estate.
Martyn Brown, a director in CBRE’s investment team, said: “Unsurprisingly, the office sector was the best performing asset class in Scotland during Q3, driven by the strong capital value growth achieved in several noticeable investment sales.
“International buyers continue to be active in Scotland.”