The Scotland all property total return for Q1 2018 was 1.7%, down from 2.1% achieved in the final quarter of 2017, but ahead of the 1.5% return in Q1 2017.
On an annualised basis, most sectors in Scotland saw an improvement in total returns. The all property total return increased by 25 basis points to stand at 7.0% for the twelve months to the end of March. This was in contrast to the a general trend for the UK, which saw annualised returns dip lower over the same period.
Despite this positive overall picture, performance of the three main sectors (retail, offices and industrials) was little changed. The star performer in the market has been alternatives – a varied mixture of smaller, specialist real estate types, ranging from student accommodation and care homes, to pubs, hotels, leisure and roadside services.
The alternatives sector has been taking an increasing share of investment spending in recent years, across the whole of the UK but also in Scotland. In Q1 alone £170m was spent on the alternatives sector in Scotland, well ahead of spending in both the retail and industrial sectors.