Industrial property and retail warehousing has outperformed investment in Scottish offices for the first time since 2011, according to Knight Frank.
The sub-sectors were responsible for driving commercial property investment in Scotland, with a combined investment of £541m last year.
The estate agency and property consultancy revealed that this accounted for nearly a third of 2020’s overall investment figure - and was an increase of 45% on 2020’s £374m and a 29% increase on 2019’s £418m.
Investment in Scottish offices performed consistently, with £355m invested in 2020, but still remains below 2019 levels, when the sector saw £739m invested.
Knight Frank said it expected investment in offices to pick up this year as more people begin to return to workplaces and travel restrictions ease.
In total, investors acquired nearly £1.7bn of commercial property in Scotland during 2021, up nearly a fifth on the £1.4bn registered in 2020. In 2019, the equivalent figure was £2.1bn.
Knight Frank found that investment in shopping centres was buoyed by the £140m sale of Glasgow’s Silverburn by Hammerson, reaching £155m, compared to £27m in 2020 and £38m in 2019.
In Scotland’s three largest cities, Glasgow saw the highest level of investment with £475m, Edinburgh had the second largest invested with £429m and Aberdeen accounted for £54m - nearly doubling 2020's figure.
The research revealed that international investors were again the most active buyers in Scotland - accounting for around 44% of investment.
Private property companies represented just over a quarter of investment, while publicly-quoted property companies and UK institutions made up 9% and 7% of the total figure.
Alasdair Steele, head of Scotland commercial at Knight Frank, said: “Last year’s investment figures highlight the changes to investor demand since the pandemic began, with an almost insatiable appetite for retail warehousing and industrial property driven by changes to people’s shopping habits. That only looks likely to continue in 2022.
“Despite offices remaining some way off investment levels seen before the pandemic, prime offices remain highly sought after, reflected in some keen yields on office deals towards the tail end of last year.
“We expect to see more activity in this sector in the months ahead, with Edinburgh and Glasgow remaining good value compared to many other major European cities.”
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