The £324m total was just 11% below the five-year average and down 49% on what was an exceptionally busy first quarter of 2022. Looking forward, there are a number of sales being prepped, which is likely to see activity pick-up further in quarter two.

One of the key deals of the quarter was the £36.8m sale (6.50% NIY) of Quay 1 by DWS to Capreon. This deal illustrates the robust appetite for the Edinburgh office market. Occupiers in this multi-let building include Apple, Bloomberg, Clevermed, FCA and STV.

Other notable transactions included Frasers Group £29.5m acquisition of the Overgate in Dundee, which reflects a 10% NIY and is anchored by popular brands such as Next, Primark, and H&M.

Additionally, the Lothian Pension Fund purchased Corstorphine Retail Park in Edinburgh for £16.265m from Hunter UK Retail Limited Partnership, while L&G sold Tennents distribution warehouse in Cambuslang to a private family trust for £14.2m.

Lismore director, Colin Finlayson said: “After a significant write-down in values during quarter four of 2022, the chasm between buyers and sellers had narrowed and it felt like more liquidity was on the horizon. The UK has also been one of the quickest markets globally to re-price, which should ensure it retains its attraction to the international market. The most recent banking events may not increase the chasm but caution on pricing certainly remains in the air.”

Across the sectors, the Scottish logistics market is finding its level with best-in-class yields settling between 5.50-6.00%, whilst the picture in retail continues to be mixed, with retail warehousing having a deeper pool of potential investors than the high street. Pricing out of town remains reasonably robust (5.5 – 6.0% for prime) with the very best high street still 6.5% plus.

Prime offices are starting to find their level with renewed interest from some UK Funds for the best product. The range is settling at 5.5 – 6.0% but secondary remains more challenging with pricing needing to be 7.0% plus with scope to improve ESG credentials remaining paramount.

The living sector continues to be most sought after (in terms of weight of capital) and robust pricing. For the right product, 4.25-4.5% on BTR and 5.5%+ on PBSA remains the range. Many potential deals in this space are likely to be forward fundings, with pure equity investors the most competitive, albeit a small pool.

Colin Finlayson

Mr Finlayson concluded: “There remains a significant weight of private equity circling the UK with interest, but until we start to see some more encouraged selling, it feels this group will have to keep their powder dry for a little longer.

“Similarly, the majority of funds have been taking a ‘wait and see’ approach. However, we have seen a small number of slightly more entrepreneurial investors seeing it as an opportunity to acquire long term holds at comparatively attractive pricing.”