Property deals

Wealthy Scots spend £40m acquiring city assets

101 George Street is among the properties acquired by wealthy Scots

Wealthy Scots are taking advantage of a pause by some institutional investors to acquire prestigious commercial property in Edinburgh.

High interest rates and attractive bond yields have made some investors hold back from mid-sized retail and office assets until valuations settle.

In their place, wealthy Scottish individuals, family trusts, and private investors have spent up to £40 million securing some of the city’s top commercial property.

In recent months, they have acquired 7 Castle Street, as well as the building housing the Contini restaurant and a Black Sheep Coffee outlet in George St, and a Princes Street retail unit occupied by Swarovski.

According to property consultancy Knight Frank, there are signs that the trend will continue.

Last year, Edinburgh’s only Wickes – located on Stevenson Road – was sold to a UK family trust for £6m, with all five underbidders being Scottish high-net-worth individuals.

Around £50m of privately held wealth also bid for a trio of property assets on George Street, which included occupiers such as The White Company, Gant, and Hackett.

High net worth individuals are contributing to a rise in investment in Edinburgh’s commercial property market. Knight Frank analysis published last week found that £596m of deals have been completed so far this year, which compares with £555m for the 12 months of 2022.

Euan Kelly, capital markets partner at Knight Frank Edinburgh, said: “There are great commercial property opportunities for high-net-worth individuals looking to invest at the moment.

“If you know Edinburgh and believe there is value in its main thoroughfares, you are looking at an opportunity that hasn’t existed since 2008, with other buyers keeping their powder dry in the current economic climate.

“Yields on gilts and returns on cash are obviously at the most attractive they have been in the best part of 15 years. However, over the long term, property has tended to outperform them and offers the opportunity for capital growth and a degree of income protection, with a lot of rental agreements linked to inflation.

“We have seen a great deal of interest from wealthy individuals and family trusts in assets between £5m and £20m and, even where they haven’t been successful, they have been highly competitive.

“They are keener to invest, and we expect to see more Scottish money buy up commercial property assets in Edinburgh throughout the remainder of the year and into 2024.”

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