Scotland has attracted over half a billion pounds of international capital in the first half of 2019 and is on track to become the best ever recorded year of inward investment for commercial real estate in Scotland, according to Savills, the international real estate advisor.
Almost half (49%) of all investment €645m (£575m) into Scotland in H1 2019 was made by international investors, representing the largest share of inward investment since 2016. Asian investors accounted for the largest proportion investing €269m (£240m) into Scotland over the year, surpassing the €202m (£180m) invested in the whole of 2018. South Koreans invested over €224.4m (£200m) and invested in some of the largest deals in Scotland. Leonardo Innovation Hub was sold to Korean investors for €112.2m (£100m) with a 5.9% yield but the largest deal this year was to German investors who bought 4-8 St Andrew’s Square for €134.6m (£120m), representing a yield of 4.45%. European investors also continue to invest heavily into Scottish commercial real estate with almost €224.4m (£200m) invested, with offices most in demand.
Nick Penny, head of Savills Scotland and director in the investment team, commented: “2019 is shaping up to be a record year for inward investment into Scotland. Investors are attracted by the strong performance of the economy, record employment and more attractive yields on offer relative to other regional cities in the south-east. Recent plans set out by the government to position Scotland as a forward-looking digital nation by embracing 5G has the potential to enhance Scotland’s global competitiveness and continue to drive inward investment. We are already experiencing a growth in the tech sector, particularly in Edinburgh, and with digital becoming more engrained in business processes and procedures, having a fast and reliable digital infrastructure will become increasingly vital for businesses.”
