The Big Interview: Alasdair Steele, head of Scotland commercial at property consultancy Knight Frank

Alasdair Steele is head of the commercial business in Scotland of independent global property consultancy Knight Frank.

The London-headquartered firm says it advises clients from individual owners and buyers to major developers, investors and corporate tenants, with more than 20,000 staff operating from 488 offices across 57 territories.

It can trace its roots back to 1896, with deals it has helped lock down since including a private sale of Stonehenge, and selling Chartwell to Winston Churchill.

The business opened in Edinburgh in 1913, and now Mr Steele is also responsible for the day-to-day running of its office in the Scottish capital. He has worked in investment teams in London and Scotland, and left DTZ – now known as Cushman & Wakefield – to join Knight Frank, where he is a partner, in 2010.

The latter provides regular analysis of Scotland’s commercial property market, for example in March saying Edinburgh was the most active UK city for hotel investment outside London, with Mr Steel commenting at the time that Scotland’s prime cities had “performed strongly since Covid restrictions began to ease”.

You said in January that Scotland’s commercial property market had proved its resilience over the previous two years. Could you elaborate on this, and cite any deals you feel have been key?

Transactional volumes in Scotland have held up remarkably well during the pandemic and we have seen pricing maintaining its pre-Covid levels, or even hardening in key areas of the market – prime offices, industrial and retail warehousing being the obvious examples.

One of the key reasons that investors are still looking to buy in Scotland is because the occupational markets have also held up surprisingly well. The pre-letting of 280,000 square feet at M&G’s The Haymarket scheme by Baillie Gifford in the midst of the pandemic was a remarkable indicator of the health of the Edinburgh office market.

The market for Scottish property investment 'has now become truly global' - according to Mr Steele. Picture: Lisa Ferguson.

Looking ahead, do you expect big changes in the split of where investment capital comes from? Looking at overseas investment specifically, this has funded the majority of deals in some years, but fell to less than half in 2021… and how much of an impact is Brexit having?

The sources of capital will ebb and flow over time, but what is key is that the market for Scottish property investment has now become truly global. It is no longer dominated by UK investors and there is keen interest from all corners of the world. There is a lot of money looking to invest in Scotland from both the Middle East and the United States at the moment, as well as continued interest from European and UK institutions.

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The drop in numbers during 2021 seems to just be a blip caused by a small number of large transactions carried out by UK investors, which skewed the figures – the long-term trend should continue to show strong interest from overseas capital. It’s hard to have a clear view on the impact of Brexit just now, as there is so much going on globally. I think that will take a while to shake through.