Transaction volumes in Q2 appear relatively healthy at £296 million, representing an increase of 9%, compared to Q2 2024. However, delving deeper into the numbers tells a somewhat different story, with two transactions accounting for 48% of total market activity this quarter and volumes 21% below the five-year average.

Stripping out landmark transactions, such as Nuveen’s £100m sale of the W Hotel at Edinburgh’s St James Quarter to Schroders; and Sovereign Centros’ £54.44m disposal of St Enoch Shopping Centre in Glasgow to Praxis, total investment volumes are actually down on the same period last year, underlining what has been another muted quarter for the market.

Chrissie Clancy, investment surveyor at Lismore, said: “Edinburgh’s hotel market continues to outperform, buoyed by strong tourism and business travel. The city’s high occupancy (85%) and double-digit RevPAR growth are driving investor appetite for increasingly scarce redevelopment opportunities.

“The high street retail sector is also regaining momentum, with investor focus broadening beyond Buchanan and George Street to the best parts of Princes and Argyle Street, supported by limited supply and rental growth.

“Elsewhere, the market is showing early signs of renewed activity, with Glasgow offices seeing increased interest and several deals under offer.

“French SCPI buyers remain active, now expanding their focus beyond the Central Belt to include Aberdeen for well-let, high-yielding assets. As income becomes the primary driver of returns, asset management-focused investors are well placed, while sub-£10m lots remain highly liquid among private, often debt-free, buyers.”

In a landscape defined by economic uncertainty and shifting investor sentiment, consistency has become a prized commodity and nowhere has that been more evident than in Scotland’s logistics sector. Amidst wider market volatility, logistics has emerged as a rare constant, driven by strong occupational demand, critically low supply and renewed investor appetite.

Lismore’s quarterly investor research indicates that sentiment towards Scotland’s logistics sector remains broadly optimistic. Over half of respondents (56%) expect to be net buyers in H2 2025, with just 10% anticipating they will be net sellers. Appetite is strongest among institutional funds, with 71% identified as net buyers, while investment managers and property companies also indicated positive momentum. However, limited availability of high-quality stock was a recurring theme, with many investors noting that their ability to transact will depend on suitable opportunities coming to market.

The survey also points to stabilising yield expectations, with 53% of respondents predicting prime logistics yields will remain steady and 38% expecting yields to harden, buoyed by the prospect of interest rate cuts later this year.

When asked about key drivers of logistics investment, occupational demand (29%) and rental growth (26%) topped the list, reflecting a continued focus on income resilience and market fundamentals. Liquidity, minimal void risk and yield compression potential were also cited, alongside qualitative feedback emphasising capital deployment needs, low obsolescence risk and sector stability.

For an expert view on logistics, Lismore spoke with Valentine Beresford, investment director, and Hugh Chivers, investment executive of LondonMetric Plc. They said: “Logistics continues to be our preferred sector, driven by strong demand and chronic supply constraints.

“While rising debt costs and limited stock present challenges, they’re market-wide, not sector-specific. The biggest issue now is the lack of investable opportunities, with strong competition when assets do come to market.

Ms Clancy concluded: “The UK macroeconomic outlook offers cautious optimism; with inflation softening and interest rate cuts likely in the second half, investor sentiment may begin to turn a corner.

“With a number of significant deals expected to conclude in the months ahead, we anticipate a meaningful uplift in activity during H2 2025.”

The full Lismore Quarter 2 2025 Review, including Research Findings & Expert Views is available to download from here.