Andrew Kerr Speaking Edinburgh Development Waterside

Edinburgh is due to outstrip Glasgow within the next 15 years to become Scotland’s biggest city, the Chief Executive of the Scottish capital’s council has told our conference. In the opening keynote presentation Andrew Kerr said that by 2050 Edinburgh’s population is due to grow by half. Based on projections the Scottish Capital will overhaul Glasgow by 2031 as the population of the country’s current biggest city shrinks.

Unlikely most other major Scottish cities the focus for Edinburgh will be on regeneration not growth – with the city needing to deliver more sufficient Grade A office space and housing. That means Edinburgh ‘has a huge opportunity’ to grow around Granton in the east of the city, which is ‘the largest under developed waterfront in Europe’.

Delivery within the waterfront area, where the council own around 90% of land, will be easier than to the west where a number of major land holdings have to be brought together. The area could receive a major boost as a decision is soon set to be made on the £165m extension of the tram network to the waterfront area. Kerr said: ”The east will go quicker because we have more control. It’s a fantastic opportunity where Edinburgh is going to go.”
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Craig Sanderson, Chief Executive Officer of Edinburgh-based Link Housing, said the social landlord is discussing the establishment of a joint venture to build in the waterside area with the Port of Leith. This would help to deliver Link’s plans to build 3,200 new homes over the next five years – a 50% increase in the 55-year association’s total stock.

Chris Perkins, Head of Business Space at M&G Real Estate, revealed that the fund manager is drawing up a revised masterplan for its Haymarket development which it recently purchased. The scheme, which is located on a four-acre site next to the recently refurbished railway station of the same name, is ‘the most important scheme within the city’ according to Perkins. The scheme will bring over £250m of development including:

  • 3 Grade A office buildings totalling 350,000 sq ft
  • 40,000 sq ft of retail and leisure space
  • 190-room hotel
  • 172-room aparthotel

Any revisions to uses and massing will be in line with the existing masterplan with work due to start on site in the second quarter of 2019. Reflecting the continued strength of the office market in Edinburgh’s central business district, the length of rent-free sweetener periods being offered in the city had declined from 18-24 months to 12, with Perkins saying: ”With an increasingly diverse occupier demand we are seeing rental growth moving into the mid 30s and expect to see that continue in the next few years.”

David Peck, Managing Director of Buccleuch Property, told delegates that the uncertainty surrounding Brexit is ‘weighing on commercial decisions’ saying: ”It’s definitely creating a little bit more caution and decisions are taking longer. The next three to six months will hopefully provide clarity.”

Many institutions and overseas buyers are ‘awash with cash’ so they’re continuing to buy, that banks are ‘incredible reluctant’ to lend according to Peck.

Peck also shared details on Buccleuch Property’s developments including the 700 acres scheme at Shawfair in Edinburgh which is ‘possibly the largest urban extension in Scotland’. More than 1000 housing units at the site are already complete or have secured detailed consent with another 400 homes going through the planning process. The next ‘key challenge’ is to bring forward the town centre and mix of uses around the site’s new railway station, which is on the recently re-opened line between Edinburgh and the Borders.

He also highlighted a mismatch in supply and demand for research space around Edinburgh, pointing to research recently carried out by consultants Ryden. This had showed a ‘significant shift’ in occupier demand towards ‘sui generis’ uses, like health care and research and development, which are not recognised by councils as employment.

 

We’ll be back in Scotland in 2019 – our up and coming events can be found here. 

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