The vast majority of investors are open to investing in Edinburgh in the second half of 2024, research from Lismore Real Estate has found.
Some 90% from across the UK are considering investing in Edinburgh in the second half of the year.
The city is known for its culture, education, thriving financial and tech sectors, robust rental growth in prime city centre offices, a resurgent prime retail sector, along with the strongest regional hotel sector in the UK.
Craig McDonald, principal and managing director of Ardstone Capital UK, who said: “The city offers a unique opportunity with its limited supply of Grade A office space, especially appealing in the office and retail sectors.
“Given the critical office supply shortage, over the next 12 months, we anticipate that rents may rise to close on £50-£52.50 per square foot for Grade A space. With the St James Quarter now full and other new entrants coming to the city, the case for opportunities with properly re-based rents in the best retail pitches of Princes Street and George Street, is compelling.
“In the short to medium term, key sectors driving demand include tech and the enduring financial services sector.
“Despite political uncertainties, our investment decisions are driven by solid property fundamentals and Edinburgh’s unique characteristics make it a prime location for investment.”
Over the next six months, 44% saw living as their most favoured sector for investment with the office, retail and industrial sectors accounting for just under 20% each.
Competition remains strong for purpose-built student accommodation sites in the city, with demand and supply dynamics continuing to prove attractive.
However, it was noted that clarity over the Housing Bill and rent controls is required to unlock pent up demand for BTR investment.
Chris Macfarlane, director of Lismore added: “Edinburgh remains a vibrant capital city, with a healthy cross sector occupational market provide a compelling investment case.
“Top quality well located city centre offices with strong ESG credentials continue to attract a broad range of investors including UK institutions, overseas pension funds and high net worth individuals, drawn by the city’s global appeal and strong market dynamics.”
“With limited development and high demand, prime rents at £45 per sq ft signals healthy growth over the coming years. Strong rental growth is also expected for student accommodation and prime high street retail.
“Edinburgh has shown through good times and bad that it’s key markets remain liquid and with a broad investor base, Scotland’s capital is a serious proposition for any investment decision.”
