Investment in Scottish commercial property investment was £387 million in the first quarter of 2026 — a 21% drop year-on-year and 16% down on the average since 2020 — according to Knight Frank’s analysis of Real Capital Analytics (RCA) data.

Knight Frank’s head of Scotland commercial Alasdair Steele said: “Uncertainty is always the enemy of transactions and that’s been reflected in what we’ve seen in the first quarter of 2026.

“While the year began with optimism, the conflict in the Middle East has undoubtedly had an impact on the market, with investors delaying decisions as they gauge the implications of higher energy prices, shipping disruption, and wider geopolitical risk …

“At the same time, the rising price of oil has shifted expectations around rates cuts this year – five-year SONIA swap rates have moved up approximately 80 basis points over a month and the Bank of England has held interest rates at 3.75%.

“All of these factors feed directly into property pricing and financing costs and, as these keep moving, reaching a price that both buyers and sellers can commit to becomes more challenging.

“Nevertheless, deals are still being done – particularly at the higher end of the market, which the average transaction size shows. Activity is increasingly focused on prime assets, with a good level of demand for properties offering strong fundamentals, value potential, or opportunities to drive performance through active management …

“Edinburgh and Glasgow continue to show resilient market fundamentals, especially for prime assets. Aberdeen also offers value for investors who recognise the city’s unique market conditions and are willing to focus on sectors aligned with its energy‑focused economy.

“How the rest of the year takes shape will be heavily influenced by what happens in the Middle East and the impact that has on inflation, but the Scottish commercial property market has demonstrated its resilience in recent years and will no doubt continue do so.”