Lismore Real Estate Advisors has published its review of the Scottish investment market for Quarter 2 2026.
Despite the Bank of England base rate now sitting at 3.75% and industrial rents having delivered some of the strongest growth of any commercial property sector over the past decade, the investment market remains relatively subdued.
Scottish investment transaction volumes reached £358 million during Q2, up 21% on the same period last year but still 7% below the five-year quarterly average. Hotel and purpose-built student accommodation (PBSA) transactions dominated activity, accounting for 67% of total Q2 deal volume.
Among the quarter’s headline transactions was the sale of the DWS PBSA portfolio to La Caisse and Vita, which included two assets in Glasgow and Edinburgh.
The hotel sector also saw one of Scotland’s largest-ever investment deals, with the luxury five-star Cameron House Resort on Loch Lomond sold by KSL Capital Partners to London-based investment firm Victory Group. The transaction is understood to have been worth around £100 million.
In Edinburgh, key transactions included the £20.19 million sale of prime mixed-use asset at 81/85 George Street to a private investor, alongside Hines’ circa £20 million acquisition of Straiton Retail Park.
In Aberdeen, the circa £19.50 million sale of BP’s modern logistics facility at D2 Business Park to a US REIT completed, while in the west of Scotland, Cable Properties & Investments Limited purchased 55 Fullarton Drive, Cambuslang for £10.85 million.
Chrissie Clancy-Crofts, Senior Surveyor at Lismore comments:
“Whilst the quarter has been characterised by relatively limited transactions and, with a few exceptions, smaller lot sizes, opportunities remain for vendors looking to capitalise on more captive buyer pools.
“We estimate that there is well in excess of £200 million of deals currently under offer in the Scottish market. Although the summer holiday period may push completion of some transactions into late Q3 or early Q4, the strength of the pipeline provides encouraging evidence of underlying investor demand.
“A shortage of core investment opportunities has suppressed Q2 volumes, yet investor appetite remains healthy. UK institutional fund activity is relatively sporadic, allowing for private (equity) buyers to see the opportunity but the traditional debt backed buyers continue to contend with a fluctuating debt market. This period of volatility seems set to continue, making the underwrite for core plus assets more challenging.
“Within the logistics sector, assets offering robust rental reversion, supported by strong open market evidence, or those benefiting from guaranteed income growth through fixed uplifts or index-linked reviews, have remained particularly sought after.
“Edinburgh offices remain compelling, as the occupational story continues to be strong, with rental growth taking city centre Grade A space to just under £50 per sq ft. Recent core plus sales have attracted a good depth of competition.
“The strongest retail pitches in both Edinburgh and Glasgow continue to experience competition among retailers for the best space, supporting further rental growth.
“Despite wider market uncertainty, demand for well-priced prime assets remains strong, particularly in logistics, retail warehousing and high-quality PBSA. Private investors are capitalising on opportunities as debt-backed buyers face tighter lending conditions, while scarcity continues to drive competitive interest. We expect development activity to remain focused on sectors where viability and long-term fundamentals are strongest.”