UK investors returning to the Scottish commercial property market

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In the last few years, property investing in Scotland has been attractive for overseas investors, but with less activity by UK investors. This situation has changed over the last twelve months when UK investors have shown increased interest in Scotland.

Following the Brexit vote, the value of sterling fell, making property investment cheaper for overseas investors. In Edinburgh, 90% of the total invested in 2016 in office space was by overseas investors, an increase from 62% in 2015, and 50% in 2014.

The Scottish independence referendum took place in 2014, and the EU referendum vote in 2016. These two events created political uncertainty that is thought to have put many UK property investors off Scotland. The political climate is now seen as more settled, and UK investors have become more active.

Many large investors have recently purchased Scottish property. Aberdeen Standard Investments bought a large residential block in Edinburgh for £27.5 million. Rockspring Property Investment Managers bought office and retails property in Edinburgh’s St. Andrew Square for £25.7 million.

Many individual investors are not large enough to finance multi-million pound deals. There are opportunities for buying smaller properties and commercial mortgages are available at good rates to finance acquisitions.

Overseas investors are still active in Scotland, but they are now competing with more UK investors. There is still uncertainty about the full effect that Britain leaving the European Union will have on the Scottish economy, but this does not appear to have put off overseas and UK investors.

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