Lismore Real Estate Advisors has recently published its analysis of the Scottish investment market for the second quarter of 2026. Despite the Bank of England’s base rate increasing to 3.75% and the industrial rental sector experiencing some of the most significant growth in recent years, the overall investment market remains relatively quiet. During this quarter, Scottish investment transaction volumes reached £358 million, which marks a 21% increase compared to the same period last year. However, this figure still falls 7% below the five-year quarterly average. Notably, transactions in purpose-built student accommodation (PBSA) and the hotel sector played a pivotal role, together accounting for an impressive 67% of the total deal volume for Q2.
The Investment Landscape
The quarter has been marked by a scarcity of transactions, with most activity involving smaller lot sizes. Nevertheless, there are still considerable opportunities for vendors aiming to take advantage of a more focused pool of eager buyers. It is estimated that over £200 million worth of transactions are currently under offer in the Scottish market. While the summer holiday period may delay the completion of some deals until late Q3 or early Q4, the robust pipeline offers promising indications of sustained investor demand.
Investor Sentiment and Market Dynamics
A lack of core investment opportunities has contributed to the subdued transaction volumes in Q2, but the appetite among investors remains strong. Activity from UK institutional funds has been relatively inconsistent, which has allowed private equity buyers to identify opportunities. However, traditional debt-backed purchasers continue to navigate a fluctuating debt market. This ongoing volatility is likely to complicate underwriting processes for core plus assets. Within the logistics sector, assets that present substantial rental reversion, bolstered by solid open market evidence, or those with guaranteed income growth—either through fixed uplifts or index-linked reviews—are particularly sought after.
Office and Retail Insights
In Edinburgh, office spaces remain attractive, with the occupational landscape showing resilience. The rental growth for city centre Grade A spaces has now reached nearly £50 per square foot. Recent core plus sales in this sector have seen a robust level of competition. The most desirable retail locations in both Edinburgh and Glasgow have also attracted competition among retailers, which is driving further rental increases.
Key Transactions in Q2
Among the most significant transactions during the quarter was the acquisition of the DWS PBSA portfolio by La Caisse and Vita, which included schemes located in both Glasgow and Edinburgh. Additionally, the hotel sector witnessed one of Scotland’s largest-ever investment deals, with the luxury five-star Cameron House Resort on Loch Lomond sold by KSL Capital Partners to London-based investment firm Victory Group, reportedly valued at around £100 million.
Additional Noteworthy Sales
In Edinburgh, a prime mixed-use asset located at 81-85 George Street was sold for £20.19 million to a private investor. Hines also made headlines with its acquisition of Straiton Retail Park for approximately £20 million. In Aberdeen, BP’s modern logistics facility at D2 Business Park changed hands for roughly £19.5 million, sold to a US REIT. Meanwhile, in the west of Scotland, Cable Properties & Investments Limited acquired 55 Fullarton Drive, Cambuslang for £10.85 million.