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Knight Frank: Aberdeen commercial property attracts £181m during H1 2024
Aberdeen’s commercial property market saw significant inflows in the first half of 2024, reaching its highest level of investment since 2018, according to Knight Frank.
Analysis of RCA data by the independent commercial property consultancy found that £181 million was invested in commercial property in the Granite City in the first six months of 2024 – more than double the £78 million recorded in the same period in 2023 and well above the £99 million average over the past five years.
Lone Star Real Estate Fund’s £111m purchase of Union Square accounted for the majority of investment in Aberdeen, meaning retail accounted for two-thirds (67%) of the six-month total. Industrial was the second most active sector (15%), while hotels were close behind in third (13%).
Investment into Aberdeen accounted for almost a quarter (24%) of total investment into Scotland during the first six months of 2024. International investors were the most active buyers, accounting for 62% of investment volumes.
Alasdair Steelehead of commercial for Scotland at Knight Frank, said: “While uncertainty over when interest rates will be cut has slowed deal activity, the Aberdeen investment market has been comparatively strong – boosted by the sale of Union Square.
“The city has also seen a reasonable amount of activity in the industrial and hospitality sectors. More generally, market sentiment remains cautiously optimistic and we expect to see an increase in activity over the next six months, both in Aberdeen and across Scotland.”
Matt ParkPartner at Knight Frank Aberdeen, added: “The occupancy market in Aberdeen has recovered from pandemic-era lows and is settling into a much more consistent level of activity.
“This is starting to filter down into the investment market and while the first half of 2024 may have been distorted by the sale of Union Square, we are seeing much more interest in the other assets coming to market – particularly where there is redevelopment potential or the opportunity to add value through strong asset management.”