Rents rising fast in Scotland

By Liza Helps Property Editor Logistics Matters

FUELLED BY robust tenant demand and tight vacancy, industrial rents across Scotland unexpectedly grew reversing an earlier slowdown.

The strongest gains were in Glasgow where rents rose 9.4% in 2024. Warehouse rents in Edinburgh and Central Scotland grew by around 7%, while Aberdeen rents rose by 5.1%. 

In Aberdeen net absorption turned positive and vacancies fell steadily throughout the year and while Scotland’s industrial vacancy rate continues to hover around 3.5%, it is markedly lower in places such as  Glasgow and Edinburgh, which recorded vacancies around 2.5%. Along the M8 corridor, which connects the two cities, they are sub-2%.

The acceleration in rental growth across Scotland comes as it is cooling across the UK. Rising vacancy amid negative net absorption, record amounts of sublet space and elevated levels of construction activity have pulled UK average annual rental growth down by about half to 4.5%.

Prime warehouse rents in Scotland’s central belt stand around £10 per ft2. The lack of new schemes coming forward is expected to keep vacancies in the low single digits, fuelling further rental growth.

CoStar’s baseline scenario calls for rents to expand by 5% per year across Scotland over the next three years, a percentage point above expectations for the UK. However, given the tight occupier market, risks to the forecast may be skewed to the upside.