By Jonathan McManus

Scotland’s commercial property sector has entered 2026 with a renewed and welcome sense of confidence, particularly across the West of Scotland where my firm, DM Hall, is seeing enquiry levels well ahead of those recorded at the same point last year.

After a protracted period of economic caution, the recent fall in interest rates has offered buyers some breathing space and contributed to a noticeable lift in activity. Even so, investor sentiment remains partly shaped by uncertainty around the upcoming Scottish elections and wider political tensions, which continues to encourage many to act decisively on opportunities but to remain cautious about longer term commitments.

Across retail and office markets, the story is still one of ongoing adjustment. These sectors remain challenging and continue to evolve as owners and occupiers assess the viability of alternative uses, conversion potential and broader occupational strategies.

While this makes decision making more complex, it has also opened up new possibilities for investors who are prepared to move quickly and engage in more creative asset management.

The ability to transact swiftly is becoming increasingly important. Our firm continues to see a clear advantage for cash buyers who are able to complete purchases without reliance on external funding.

This is particularly relevant at a time when delays to finance‑led transactions are still common, creating openings for well capitalised purchasers to secure high quality assets in competitive circumstances.

Conditions in the residential investment sector are also influencing behaviour. Regulatory pressures and uncertainty around future legislation have led many landlords and private investors to look toward commercial assets, including those that can be held within SIPP structures, as a more stable and predictable alternative.

This shift is contributing to increased demand across several commercial categories, but one sector stands out above all others.

Industrial property has maintained its position as one of the strongest performers in Scotland, with demand consistently outstripping supply and competition remaining intense, particularly for freehold units below 5,000 square feet. Our firm’s recent activity illustrates the scale of this interest.

In East Kilbride, a small industrial unit brought to market attracted fifteen offers within two to three weeks, while another, similar, unit in the town received around forty notes of interest within the first week of marketing and quickly proceeded to a closing date.

In Cumbernauld, a comparable opportunity generated fifteen offers within a fortnight, leading to a sale within six weeks at a level significantly above the asking price.

Such examples reflect the appetite among owner occupiers and investors for high-quality, well-located space that is immediately usable and strategically positioned.

A further example of this strong demand is the recent letting in Hamilton handled by my DM Hall colleague, Jacqueline Towie. The property at 107 Bothwell Road, a 14,835 square foot warehouse and office facility, was secured on a ten-year lease following an extensive refurbishment programme completed in 2025.

The works included external improvements, renewed access arrangements, drainage upgrades, a complete roof replacement, new windows, improved insulation and the relocation of the heating system, which collectively elevated the EPC rating from D to B.

The quality of the refurbishment, combined with the property’s strategic position close to the M74 and wider motorway network, generated considerable interest and confirms the depth of demand for modern industrial space across Lanarkshire.

Despite wider market uncertainties, DM Hall continues to maintain high levels of activity, with more than four hundred live sale and lease instructions across its offices. The team also has a strong pipeline of new sale opportunities scheduled for release in the late spring, reflecting both ongoing confidence from clients and a belief that the market is well placed to perform steadily throughout the year.

The early months of 2026 have shown that while the Scottish commercial property market is still navigating political and economic headwinds, its fundamentals remain resilient.

Improved lending conditions, strong early year enquiry levels and an exceptionally robust industrial sector provide a solid foundation for the months ahead.

If present levels of demand continue, particularly for well-presented and well-located assets, the outlook for the remainder of 2026 is encouraging and likely to bring further competitive market conditions across several key sectors.

The Scottish and UK Government still have plenty to do to change some negativity and fear within the industry. Stamp duty changes and commercial business rates still cause concern as well as a backed-up planning process.

The Scottish market is now used to operating with economic and political pressures and a lot of “tinkering” on policy but badly needs a period of stability to allow our sectors to focus on longer term goals. Fingers crossed that such issues are given more time for consideration by all those wanting to govern in Scotland later this year.

Jonathan McManus is a commercial property partner at DM Hall LLP, Chartered Surveyors

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