Scotland’s property investment market giving out mixed signals in 2025

Investment volumes totalled some £370 million in the three months to the end of June, according to new figures, which is down on the first-quarter figure of £560m, and 22 per cent below the five-year quarterly average of £470m.

That takes the total for the first half of 2025 as a whole to £930m, which is 20 per cent ahead of the corresponding 2024 figure, according to the latest Scotland Snapshot from property consultancy Colliers.

Douglas McPhail, head of Colliers Scotland, said: “Scotland isn’t immune to the geopolitical and economic uncertainty affecting the whole of the UK commercial property market. While there were some stand out deals this quarter, the sense of momentum hasn’t yet returned to the market as a whole.

“Encouragingly when looking across the first two quarters, volumes are still ahead of 2024 levels, hopefully pointing to a stronger full year total,” he added.

The retail sector led the way in the second quarter with £150m of deals taking place, up from the £40m transacted in the opening three months of the year. This was boosted by the sale of the St Enoch shopping and leisure centre in Glasgow for circa £50m. A total of seven transactions took place over the quarter with an average lot size of £22m, Colliers noted.

Offices accounted for £100m of investment, the weakest quarterly total for more than a year. The largest deal was the £75m sale of Capital Square to Pontegadea. Across the first half of the year, investment into the sector totalled £230m, 14 per cent above the corresponding figure for the first half of 2024.

Industrial investment in Scotland remained muted in the latest quarter, with less than £30m transacted, in line with activity in the first quarter but 69 per cent below the five-year quarterly average of £80m. The largest second-quarter deal by value was the £14m sale of Unit 2 at Kirkhill Commercial Park in Aberdeen.

A recent report by rival agency Knight Frank found that hotels were Scotland’s top performing area of property investment as the overall market “pauses for thought” amid geopolitical tensions and a changing policy backdrop.

The firm’s study revealed that Scotland’s commercial property market attracted some £750m of investment in the first half of 2025. Differences in deal reporting and methodologies are likely to account for the variation between the two agencies’ first-half tallies.

Knight Frank’s analysis is based on data from Real Capital Analytics (RCA). The firm found that hotels were the top-performing asset class, with £213m of investment. That was the second highest figure for the sector during the first six months of the year since 2020, behind only 2024’s £235m. Retail was second with £207m-worth of transactions, followed by offices at £152m.

Private investors were the most active buyers during the first half of the year, accounting for 40 per cent of investment - the highest share for the six-month period in recent years.