French capital flows into Scottish commercial property

Investors from France have bought nearly £200m worth of Scottish commercial property since November, as the historic connections between the two countries take a modern twist.

New research from commercial-property consultancy, Knight Frank, has found that French buyers purchased £183m of Scottish office buildings, retail outlets, industrial units and other commercial-property assets in recent months.

Those deals added to a series of others that have concluded since 2024, taking the overall figure past £450m over that period. French funds are now one of the most active international buyers in the Scottish market, Knight Frank said. The firm added that a big contributor to the trend was the attractive yields on offer in Scotland.

French buyers have been behind some of the biggest deals in Scotland during the last few years, including the purchase of Edinburgh’s St James Quarter by Unibail-Rodamco-Westfield. More recent Edinburgh transactions include Alderan’s securing of 24-28 Frederick Street, earlier this year. 

Around half of the total French investment is accounted for by Société Civile de Placement Immobiliers (SCPIs), which are French open-ended property-investment funds. Their purchases have included 40 Princes Street in the capital.

Euan Kelly, capital-markets partner at Knight Frank Edinburgh, said: “Within French investors, SCPIs have been involved in a number of deals across Scotland – particularly at the larger end of the market.

“These buyers tend to favour ‘cleaner’ properties, with minimal asset-management requirements, which can provide a return of at least seven per cent, to satisfy the returns they offer to investors.

“As long as Scotland remains good value and the quality of the available stock coming through is right, we expect French investment in Scottish commercial property to continue.”

www.knightfrank.co.uk/commercial 

Pictured: Euan Kelly