Rising rents, particularly in prime locations, are expected to make more refurbishment and development projects viable in 2025, the Ryden Scottish Property Review 2025 found.

In Glasgow, city centre office take up is exceeding the five-year average reaching 464,000 sq ft in 2024 – a 32% increase on 2023. Around 50% of all deals were taken on either a fully fitted, landlord furnished or existing tenant fit out basis reflecting continued strong demand for move-in-ready space.

The refurbished Aurora building on Bothwell Street set a new headline rent of £39.50 per sq ft with rents predicted to rise to low-mid £40s in 2025 for prime space.

Edinburgh saw an exceptional 843,620 sq ft of re-gear transactions while take up dropped 11% to 593,800 sq ft. Prime rent has risen again to £45.50 at Waverley Gate. Market activity is challenged by a subdued development pipeline and buildings being lost to other uses.

Dr Mark Robertson, Ryden’s research partner, said: “Office rents will need to surpass £50 per sq ft to stimulate new build supply in Edinburgh. Build cost increases have slowed but continue to be an issue across commercial property, residential and BTR development in Scotland.”

2024 was a year of uncertainty for the energy industry, reflected in the 29% decrease in take up of office space in Aberdeen, however, the city is enjoying its best industrial market for a number of years particularly in the Dyce-Westhill-Inverurie corridor.

Scottish industrial occupiers are increasingly prioritising ESG-compliant buildings but many of these requirements remain unfulfilled by current stock. With lack of supply in central Scotland pre-let activity would be expected to rise but remains relatively low, however there are a number of active discussions involving occupiers within the parcel and trade sectors.

Dr Robertson said: “Greater Glasgow’s industrial vacancy rate of 3.1% is among the lowest in the UK and Edinburgh recently hit a record rent of £20 per sq ft at Causewayside. For new industrial development to pick up we need industrial rents to rise consistently and sustained investor confidence.”

Scotland’s retail market is stabilising with prime high street, destination malls and retail parks sustaining or improving their market performance over more challenged locations. Demand from retailers is rising alongside continuing diversification into food & beverage and leisure.

Footfall in Edinburgh and Glasgow city centres as well as prime shopping centres and retail parks is climbing as 2025 begins.

Investment in Scottish commercial property gained momentum in 2024 with transactions totalling £1.8bn, primarily in the industrial, hotels, living and retail warehouse sectors. Overseas equity features prominently while UK institutions have been net sellers.

Edinburgh remains the most widely favoured city but those priced out of that market are finding opportunities in Glasgow, Aberdeen and elsewhere.

Dr Robertson added: “With interest rate cuts expected in 2025 the outlook for increased investment activity is promising. Industrial and logistics will continue to be the top choice while offices could recover some ground and retail may provide the highest income return of all.”