The pound’s fall could see overseas investors’ share of investment in Scottish commercial property reach record levels, it has been claimed.

Data from property consultancy Knight Franks for the first three quarters of the year showed they already account for more than half (53%) of current volumes. This compares to their 50% share over the same period last year.

Alasdair Steele, head of Scotland commercial at Knight Frank Scotland, said Scotland’s commercial property market has continued to fare well despite geopolitical and economic turmoil.

“This is particularly true for assets that are in high demand, namely prime offices and industrials – but alternatives, particularly hotels, are increasing in popularity.

“The summer period was relatively quiet after a flurry of deals were completed in the lead up to June.

“However, as we move into the final quarter, there remains a significant amount of dry powder waiting to invest and commercial property is traditionally seen as offering a good hedge against inflation – particularly for overseas investors, with the pound’s current weakness.

“We could see them take an even more active interest in the market in remainder of 2022 and into next year.”

The figures show Scotland’s main occupier markets have largely held up – particularly in Edinburgh, where these is a chronic imbalance between top grade office supply and demand – and yields are regarded as good value compared to many other major European cities.

“We anticipate a busy end to a challenging year, provided the macro-economic situation does not change materially and the right stock is made available,” said Mr Steele.

Investment volumes in Aberdeen more than doubled from £54.04m to £116.85m – up 116% – buoyed by the sale of two retail parks. Edinburgh saw investment volumes increase 24% to £415m, while Glasgow increased by 6% to £377m.

However, other research shows there is more than 10 million sq ft of vacant office property, largely a result of hybrid working and a move to top quality space.