Transaction volumes in the Scottish real estate investment market in the second quarter of 2025 reached £296 million, an increase of 9% compared to Q2 of 2024.
That’s according to Lismore Real Estate Advisors’ latest review of the Scottish property investment market.
However, two transactions accounted for 48% of total market activity in the quarter and volumes were 21% below the 5-year average.
Lismore said: “Stripping out landmark transactions, such as Nuveen’s £100m sale of the W Hotel at Edinburgh’s St James Quarter to Schroders; and Sovereign Centros’ £54.44m disposal of St Enoch Shopping Centre in Glasgow to Praxis, total investment volumes are actually down on the same period last year, underlining what has been another muted quarter for the market.”
Chrissie Clancy, Investment Surveyor at Lismore said: “Edinburgh’s hotel market continues to outperform, buoyed by strong tourism and business travel.
“The city’s high occupancy (85%) and double-digit RevPAR growth are driving investor appetite for increasingly scarce redevelopment opportunities.
“The high street retail sector is also regaining momentum, with investor focus broadening beyond Buchanan and George Street to the best parts of Princes and Argyle Street, supported by limited supply and rental growth.
“Elsewhere, the market is showing early signs of renewed activity, with Glasgow offices seeing increased interest and several deals under offer.
“French SCPI buyers remain active, now expanding their focus beyond the Central Belt to include Aberdeen for well-let, high-yielding assets. As income becomes the primary driver of returns, asset management-focused investors are well placed, while sub-£10m lots remain highly liquid among private, often debt-free, buyers.”
Lismore said: “In a landscape defined by economic uncertainty and shifting investor sentiment, consistency has
become a prized commodity and nowhere has that been more evident than in Scotland’s logistics sector.
“Amidst wider market volatility, logistics has emerged as a rare constant, driven by strong occupational demand, critically low supply and renewed investor appetite.
“Lismore’s quarterly investor research indicates that sentiment towards Scotland’s logistics sector remains broadly optimistic. Over half of respondents (56%) expect to be net buyers in H2 2025, with just 10% anticipating they will be net sellers.
“Appetite is strongest among institutional funds, with 71% identified as net buyers, while investment managers and property companies also indicated positive momentum. However, limited availability of high-quality stock was a recurring theme, with many investors noting that their ability to transact will depend on suitable opportunities coming to market.
“The survey also points to stabilising yield expectations, with 53% of respondents predicting prime logistics yields will remain steady and 38% expecting yields to harden, buoyed by the prospect of interest rate cuts later this year.
“When asked about key drivers of logistics investment, occupational demand (29%) and rental growth (26%) topped the list, reflecting a continued focus on income resilience and market fundamentals. Liquidity, minimal void risk and yield compression potential were also cited, alongside qualitative feedback emphasising capital deployment needs, low obsolescence risk and sector stability.”