Investment activity in Scotland recorded a 137% growth above its 2003 levels during last year, taking transaction levels to Â£3billion, according to the findings of research published this week by property consultancy Lambert Smith Hampton (LSH) and Property Data.
The findings - contained in 'UK Investment Transactions' (UKIT) - reflect an overall increase in transactions across the UK of 43%, from Â£29.2 billion in 2003 to Â£41.8 billion in 2004, the highest recorded level. In addition, the highest quarterly volume of transactions recorded in the UK - Â£13.9 billion - occurred in the last quarter of 2004.
In Scotland, overall investments levels were boosted by a record start to the year, with Â£1.1billion transacted. Two-thirds of investment activity was focused on the retail sector with Â£2billion of retail property changing ownership.
Graeme Davies, Head of Investment of LSH Scotland said: "This has been an excellent year for us with some of our most significant deals to date. Our largest office transaction was Consortium Investment Management's purchase of the BBC office development at Glasgow's Pacific Quay. We have also had major involvement with several retail developments in and around Glasgow. With other developments already engaged for the future, next year's results should be equally as impressive."
Across the UK as a whole, there are also signs of a shift in the balance away from private equity towards institutional buyers, who have been the driving force behind the surge in market activity over the past 12 months.
This is the first time since the late 1970s that there has been such strength of desire by the institutional sector to place property back into the mainstream of their investment thinking.
Graeme Davies, LSH's Head of Investment Scotland, said: "The current bull market in property in the UK has shown little sign of easing and - with only one or two exceptions - activity has increased significantly, with the weight of money targeting the market continuing to grow and the spread of investors more diverse than over the previous three years. As we approach the end of the first quarter of 2005, there are clearly some concerns that interest rate rises may be back on the agenda and the financial markets have already begun to reflect this. Nonetheless, the rest of the year looks set to offer continued prospects for growth and continued optimism in the marketplace."
Source: Scottish Property Network