It’s your first Edinburgh Self Storage Scottish property review of 2025 and let’s start with the latest Rettie research that predicts house prices in Scotland are set to grow by 3% on average this year.
While this falls below the long-term trend of 4%, the report paints a picture of a stable situation overall, with a strong emphasis on the mid to upper end of the market. There’s a 2% rise in house transactions expected too.
Sales-wise, it predicts a modest improvement in 2025, but this is dependent on a fall in interest rates to stimulate more people to take the property plunge. Those in the analytics-know predict at least another duo of quarter-point cuts in borrowing costs in 2025.
New build transactions dipped a further 14% in 2024. Rising costs, a lumpy sales market, coupled with more stringent government bureaucracy all continue to dull activity.
The demand/supply imbalance has driven up the cost of renting in Scotland, with the number of new listings in the rental market continuing to fall. Rent rises do look to be slowing down in Scotland’s biggest cities but there have been hefty hikes in the past two years that tenants can ill afford.
Scottish commercial property market
Scottish commercial property investment exceeded £2bn in 2024. The research by RCA (Real Capital Analytics) puts the data ahead of 2023’s £1.5bn and fractionally ahead of the £1.9bn five-year average.
It was good news right across the Scottish property market asset spectrum.
Hotels were hot property in 2024, achieving a five-year high by more than doubling in 2023 – from £236 million to £488 million. Edinburgh brought in more than half of hotel deals in 2024, to the tune of £247m.
Offices likewise witnessed a boost, from £368m to £509m, but retail was king. Its total investment was £710m – up 7% on £664m, while industrials came back from a five-year low of £292m in 2023 to £359m last year.
International investors
The Scottish commercial market attracted international investors last year too, but more so in the latter part of it, making up 44.3% of the total investment.
Real estate investment trusts (REITs) and listed property companies were on the acquisition trail in 2024, representing 23.9% and leagues ahead of the last five-year average of 9.5%.
Rising rents, particularly in prime locations, are expected to make more refurbishment and development projects viable in 2025.
Occupier demand in Scotland
Glasgow city centre office space commanded 464,000 sq ft in 2024, up 32% on 2023 and smashing the five-year average, says Ryden’s Scottish Property Review 2025.
Businesses want their commercial premises oven-ready: approximately 50% of all deals were done on a fully fitted, landlord-furnished or existing tenant fit-out basis.
Bothwell Street’s Aurora building set a new stellar rent of £39.50 per sq ft. Rents are forecast to rise to the low-mid £40s in 2025 for prime space.
Edinburgh, meanwhile, saw an astonishing 843,620 sq ft of re-gear transactions (a renegotiation of existing lease), but take-up dropped 11% to 593,800 sq ft.
Prime rent rose again to £45.50 at Waverley Gate. Market activity is clunkier because of a development pipeline in the doldrums and building causalities falling to other uses.
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Sources:
rettie.co.uk
scottishfinancialnews.co.uk
knightfrank.co.uk
agcc.co.uk
