Lismore highlighted the sale of the luxury Cameron House on the banks of Loch Lomond to the Victory Group, which had reportedly been marketed by affiliates of KSL Capital Partners for £100m, as deals in the hotel and purpose-built student accommodation (PBSA) sectors dominated activity in the second quarter. The two sectors accounted for 67% of deal volumes during the period, with transactions including the sale of the DWS PBSA portfolio, including two assets in Glasgow and Edinburgh, to La Caisse and Vita.
Other deals of note which were completed over the quarter included the £20.19m sale of a prime mixed-use asset at 81/85 George Street, Edinburgh, to a private investor, as well as Hines’ acquisition of Straiton Retail Park outside the city in a deal worth around £20m.
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In Aberdeen, BP’s modern logistics facility at D2 Business Park was sold to a US real estate investment trust for around £19.5m, 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, said: “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 £200m 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.”
Ms Clancy-Crofts said the Edinburgh office market “remains compelling, as the occupational story continues to be strong”, noting that the “strongest retail pitches in both Edinburgh and Glasgow continue to experience competition among retailers for the best space, supporting further rental growth”.
She added: “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.”