QUARTERLY investment volumes in Scotland reached £420m in Q1 2020, up a notch from the £414m transacted in Q4 2019, but up by around 40% from a year ago, according to Colliers International’s Q1 Scotland Snapshot.
Transactional volumes remained below the five-year quarterly average of £581m. The sale of the Springside PRS scheme in Edinburgh accounted for half of all activity by value (£215m).
Offices and industrial recorded only limited activity during the first quarter, while the sale of two larger retail warehouses helped retail investment volumes to recover from a weak Q4 2019.
Overseas investors remained an importance source of capital and accounted for two thirds of all activity. UK institutions were absent from the market in Q1 2020 for the first time since the EU referendum in 2016 and for only the third time on record.
Preliminary data for April suggests that the market came to a complete standstill at the start of Q2, although Kan Am has reportedly completed their acquisition of 4 North, at North St Andrew Street, in Edinburgh for £31m / NIY 4.33%.
Furthermore, a number of assets are currently under offer, including the forward funding of an Amazon distribution facility at Glasgow Business Park, as well as high profile office and hotel asset in Edinburgh totalling circa £140m. These are being sold separately off-market which, if they complete, will help the overall figure.
Patrick Ford, director, National Capital Markets, Colliers International in Glasgow, said: “The weight of global capital has been on an upward trajectory over the past decade and although the COVID-19 impact will depress the total volume invested in 2020, we expect there to a significant upturn in activity when the UK get back to some normality.
“While it is too early to tell, it will interesting to see how office occupiers will react and what impact there will be in the regional office markets. We believe the trend of northshoring will continue, as there is not the same challenges with managing large scales densely populated commuting, after lockdown.”