Scotland’s commercial property market showed renewed strength in the third quarter, with total investment volumes rising above the five-year average and a notable resurgence in the office sector, according to new data from Lismore Real Estate Advisors.
Lismore reported that total transactions reached £440 million across 34 deals in Q3 2025 – a 3% increase on the same period last year and 12% above the five-year quarterly average.
The office sector led the market with £142 million in deals, its strongest performance since late 2024.
Headline office transactions included BauMont Real Estate and KZN Real Estate’s £53.85 million acquisition of Quartermile 1 in Edinburgh from Epic UK, and the Strathclyde Pension Fund’s £19.6 million purchase of Sentinel in Glasgow from Ardstone Capital.
LARGEST TRANSACTION
The largest transaction overall was Harbert Management Corporation’s £58.5 million acquisition of Martha Street Apartments, a city-centre purpose-built student accommodation asset sold by Chris Stewart Group.
The industrial and logistics market also saw notable activity, including Northwood Urban Logistics’ £26 million acquisition of the Malt Portfolio from CedarWood Asset Management — a 300,000 sq ft collection of multi-let industrial estates across central Scotland.
Chris Thornton (main picture), Senior Associate at Lismore, says investor confidence is gradually returning after a period of caution.
“Whilst transaction volumes remain subdued, we are seeing clear signs of renewed activity, particularly from core buyers seeking stable income from strong tenants and platform builders consolidating retail parks and industrial assets.
“The deepest demand continues to be for sub-£10 million transactions, where asset management potential or short-to-medium-term reversion opportunities attract private investors, family offices and property companies.”
DOUBLE-DIGIT YIELDS
And he adds: “Investor appetite is being driven both by those targeting double-digit yields secured against strong covenants and by value-add players pursuing refurbishment opportunities. French SCPIs remain active, but pension funds, investment managers and property companies have also re-entered the market, broadening the buyer pool.
“Macroeconomic challenges remain, but investors are treating them as background noise. After an extended period of caution, the market is beginning to re-engage. The office sector’s performance this quarter is a clear signal of renewed appetite, and we expect to see further momentum as pricing and fundamentals align.”
Lismore says the data suggests a slow but steady recovery in sentiment across Scotland’s investment market, with renewed interest in prime offices, industrials and income-backed assets.
