Over the fourth quarter, the all property total return was 2.1%, up from 1.7% in Q3 2017. As a result, the annual total return for 2017 in Scotland was 6.8%.
This level of performance compared favourably with the UK as a whole, where the total return was 10.2% as measured by the IPD Quarterly Index.
The improvement in returns is attributed to improved capital growth. Over the quarter, average capital values were up by 0.6%.
Office market performance in Q4 2017 was much improved compared with the recent past. Over the final quarter of the year, the total return was 2.2%, an increase from 1.6% in Q3. This was the larger quarterly uplift in returns for any of the three principal sectors in Scotland. It was also the highest total return for the Scottish office sector since the final quarter of 2015.
A total of £2.5bn of stock was transacted in Scotland during 2017, up from £2.12bn in 2016. Whilst investment volumes were relatively low in the first half of the year, the second half, and in particular the final quarter, had a significant impact on the strength of the year-end total.