In Aberdeen, commercial property investment reached its highest level since 2018, led by the sale of Union Square.
The highest level of investment in the Granite City came in the first six months of this year, from January to June, according to the latest data from property consultancy Knight Frank.
Knight Frank's analysis of data from Real Capital Analytics (RCA) has revealed that £181m was invested in Aberdeen commercial property in the first half of 2024.
Aberdeen accounted for almost a quarter (24%) of Scotland's total investment. Image courtesy of Frame Creates release
This is more than double the £78 million recorded for the same period in 2023 and well above the average of £99 million over the past five years.
Lone Star Property Fund's £111m acquisition of Union Square accounts for the majority of investment in Aberdeen, with retail accounting for two-thirds (67%) of the total over the six month period.
Industry was the second most active sector (15%), followed by hotels in third place (13%).
In the first six months of 2024, investment in Aberdeen accounted for almost a quarter (24%) of total investment in Scotland.
The most active buyers were international investors, accounting for 62% of investment.
Alasdair Steele, head of Scottish commercial at Knight Frank, said: “Deal activity has generally slowed due to uncertainty about when interest rates will be cut, but Aberdeen's investment market remains relatively strong, supported by the sale of Union Square.”
“The city is also seeing a fair amount of activity in the industrial and hotel sectors.
“More generally, market sentiment remains cautiously optimistic and we expect to see increased activity in Aberdeen and across Scotland over the next six months.”
Matt Park, partner at Knight Frank Aberdeen, said: “Aberdeen's occupancy market is recovering from the pandemic-era downturn and settling into more stable levels of activity.”
“That's starting to trickle down into the investment market.
“While the first half of 2024 may have been impacted by the sale of Union Square, there is much more interest in other assets on the market.”
“[This is] Especially when there is the opportunity to add value through redevelopment potential and strong asset management.”