Scottish Property Federation

Commercial property ‘worth £4.8bn to Scottish economy’, finds SPF report

A new office development at New Waverley in Edinburgh

The Scottish real estate industry contributes almost £4.8 billion to the Scottish economy and supports more than 92,000 jobs, according to a new report.

Compiled by the University of Strathclyde’s Fraser of Allander Institute under commission by the Scottish Property Federation (SPF), The economic contribution of the commercial property sector was unveiled today at the SPF’s annual conference in Edinburgh.

Among its findings is a comprehensive look at the potential economic impact of new commercial work. In total, the commercial property element of Scotland’s construction industry has a direct impact of around £2.4bn to Scotland’s economy, however taking into account the additional spill-over effects of the industry, commercial property is estimated to have a total impact of almost £4.8bn.

Combining FTE employment in construction and real estate activities, the report estimates that around 49,000 FTE jobs are directly supported by commercial property in Scotland, with the additional indirect and induced effects, helping to support total FTE employment of around 92,000.

The sector is an important source of tax revenue for both the Scottish and UK governments and is acknowledged as a barometer of economic activity; with the report’s authors stating that without high quality and effective commercial property there would be no business activity.

Despite this, however, the report also identifies a worrying lack of investable space with the amount of new commercial property being built in terms of square ft. smaller than a decade ago.

In 2009, new commercial property construction equated to 7.1 million sq ft but in 2017 the equivalent of only 1.6 million sq ft was constructed.

Similarly, whist the value of sales of commercial property have been increasing in recent years to £3.2 billion in 2016/17, this figure is still significantly lower than a decade ago.

The report goes on to show the potential for growth and concludes that for a £100m increase in new commercial property output, the economy benefits from a further £73m.

Taking a universal approach to the sector, it calculated that construction makes up around 65% of commercial new work (and 70% of total impacts from direct, indirect and induced effects). The other large contributors are from real estate and financial services who make up around 28% of the direct output of new commercial projects.

David Melhuish

David Melhuish, director of the Scottish Property Federation, who commissioned the research, said: “Commercial property plays an important role in the Scottish economy and we welcome this excellent piece of research by the Fraser of Allander Institute.

“The industry has experienced challenging times in recent years due to the economic downturn and fragile levels of business and consumer confidence which has led to a dampening of growth. However this report highlights that the industry remains an important growth generator for the Scottish economy and that there are huge opportunities for the industry to grow as a valuable financial asset for investors which in turn will drive economic activity and important infrastructure in our cities and towns.

“We continue to work with the Scottish Government to look at the barriers which exist to attracting investment into the sector. One such area where more work is required is to ensure that Scotland increases its overall supply of Grade A office stock – a vital component in attracting businesses to locate or indeed remain in Scotland and continue to be important tax generators for the economy.”

Professor Graeme Roy, director of the Fraser of Allander Institute, added: “Our analysis shows that Scotland’s commercial property industry is an important barometer of economic activity, particularly in a service based economy such as Scotland.

“The latest data shows that the sector has been growing in recent years, but levels of activity remain down on where they were a decade ago.

“That being said, our analysis demonstrates that the sector continues to make an important contribution to the Scottish economy. This is not only through the direct economic activity that the commercial property sector supports but also the wider spill-over effects benefiting businesses throughout Scotland.”

Finance secretary unveils Scottish commercial real estate opportunities to investors in London

Queen’s Square in Aberdeen would be transformed into a mixed-use urban quarter

Three of Scotland’s biggest commercial real estate propositions for 2018 were unveiled to investors in London today at a business breakfast hosted by Derek Mackay, cabinet secretary for finance and constitution.

The potential investments include a £137 million opportunity in Bothwell Street in Glasgow, the £150m Queen’s Square, Aberdeen proposition and the Advanced Manufacturing Innovation District Scotland in Renfrewshire which is seeking £250m in investment.

These opportunities were presented to a targeted audience of investors, intermediaries and leading decision makers at Scotland House, the Scottish Government’s headquarters in London.

This event is the second of its kind at Scotland House in a push by Scotland’s economic agencies – Scottish Development International, the Scottish Cities Alliance and the Scottish Property Federation – working together to pool resources and maximise results.

Finance secretary Mr Mackay said: “With more than 2,300 foreign-owned companies employing a total of 317,000 staff here and realising a combined turnover of £86 billion, foreign direct investment plays a vital role in Scotland’s economy.  A recent study reported that for every £1 spent on attracting inward investment, £9 is generated for our economy.

“Attracting inward investment is a key priority for the Scottish Government – something which assumes even more importance in light of Brexit – and is one of the aims of our Trade and Investment Strategy. The events at Scotland House, our innovation and investment hub in London, bring together senior investors, fund managers and decision makers to hear more about the benefits of investing in Scotland.”

The latest EY Scotland Attractiveness Survey (2017) highlighted that Scotland won a record number of investments from overseas in 2016, with 122 foreign direct investment deals done over the course of the year, up from 119 in 2015.  EY’s report showed for the fifth year in a row, Scotland was the second most popular part of the UK to invest in behind London.

Events such as this aim to maintain Scotland’s high ranking with the message that Scotland is a low-risk location with a variety of robust, investor ready propositions and a track record of success with international companies such as Spire, Genpact, Corporate Health and Dexcom all setting up operations here.

Neil Francis, interim managing director of Scottish Development International, said: “Much of Scotland’s success in attracting international investment comes from the strength of our connected cities and competitive business environment, and together with the Scottish Cities Alliance, we are actively engaging with target audiences in London and further afield to promote Scotland to international influencers.

“We must continue to build on the international connections that exist across many parts of our economy to attract new investment, and this event at Scotland House is a great example of how we are working closely with partners to combine our voices, networks and resources to secure economic impact for Scotland.”

The propositions on show will demonstrate the strength of Scotland’s investment opportunity across the country with the public sector agencies working closely with the private sector.

Aberdeen’s Queen’s Square project centres on the city living approach in a bid to deliver housing and re-energise the heart of the city.

Richard Sweetnam, chief officer for city growth at Aberdeen City Council, presented the city’s Queen’s Square scheme to the invite-only audience.

He said: “This is a great opportunity to showcase the major investment potential in Aberdeen directly to London-based investors as well as several international investors. We are the first Scottish city to float a bond on the stock market, we have thriving energy, digital and life science sectors and Aberdeen is soon to be Scotland’s first gigabit-speed fibre broadband city, so we have all the infrastructure in place for investors to make this their destination of choice.

“Queen’s Square offers an excellent opportunity for the right investor – with a residential-led mixed use urban quarter in the heart of Aberdeen, the project has a GDV of £150m and sits next to the new Marischal Square development which brought in £107m to Aberdeen’s economy. Events such as this, working with our partners in the Scottish Cities Alliance along with Scottish Development International, offer a fantastic opportunity to highlight the huge potential of Aberdeen.”

Scottish Property Federation unveils 2018 annual conference line up

Andrew Sutherland

Industry leaders, policy makers and academics make up the list of speakers at the 2018 annual Scottish Property Federation (SPF) conference, which looks specifically at the value of place-making, the people-centric approach to planning and design of public spaces, and how it is funded.

Investing in Places, which takes place on March 7 at the Edinburgh International Conference Centre, will welcome Derek Mackay MSP cabinet secretary for finance and the constitution, as its keynote speaker to give the government’s perspective on the sector’s role in the wider economy.

To accompany this, Professor Graeme Roy of the Fraser of Allander Institute will unveil the findings of the latest in-depth report into the economic impact of the real estate sector in Scotland, highlighting the key economic drivers, opportunities and challenges for government, developers and investors.

Also taking the stage will be David Paine, co-head of global real estate at Aberdeen Standard Investments, Peter Reekie, chief executive of the Scottish Futures Trust and Lesley Watt, chief financial officer of Miller Developments, who will join SPF vice chair Miller Mathieson, MD of CBRE in Scotland, to discuss sources of investment.

Delegates will also hear from Michaela Sullivan, group land manager at CALA Group, Maria Francké, partner at Cushman & Wakefield, and Mike Galloway, director of city development at Dundee City Council, who will lead the discussion on place-making, along with SPF chairman Andrew Sutherland, joint MD of Miller Developments.

Award-winning Scottish television and radio broadcaster Gavin Esler will facilitate the conference.

Andrew Sutherland said: “The role of the real estate industry to create our built environment around the needs of local communities and attract investment capital to grow our economy has never been more important.  This year’s SPF conference looks at how we can harness these opportunities.

“With such a strong line-up of speakers and several interactive sessions to enable delegates to debate the issues of investment and place-making, the conference provides a platform for the industry to help shape the way forward.”

The SPF Conference is sponsored by Edinburgh-based Miller Developments and international law firm Womble Bond Dickinson.

Budget: £4 billion allocated for Scottish infrastructure

Derek Mackay

An allocation of over £4 billion of funding for infrastructure which includes a £756 million contribution to the Scottish Government’s target of delivering 50,000 affordable homes by 2021 were amongst a range of investment plans set out in the 2018-19 Draft Budget by finance secretary Derek Mackay.

The infrastructure investment, which is in line with the Programme for Government commitment to invest £20bn over the life of this parliament, also includes beginning the procurement of Scotland’s £600m universal superfast broadband programme to be delivered over the next four years; investing £60m in Low Carbon Innovation Fund to deliver innovative low carbon energy infrastructure solutions including for electric vehicles and investing £1.2bn in transport infrastructure, including key road projects and further electrification of the rail network.

Publishing the Draft Budget to parliament yesterday, Mr Mackay set out a programme that will also:

  • Deliver the first £70m of a new £150m Building Scotland Fund to unlock new house building, develop new low carbon commercial property and support research and development
  • Set aside £340m for initial capitalisation of the Scottish National Investment Bank
  • Drive regional economic growth by more than doubling investment in city region deals.
  • Deliver £18m as part of a £65m package of investment for the National Manufacturing Institute to make Scotland a global leader in advanced manufacturing

Responding to the announcement, David Melhuish, director of the Scottish Property Federation, said: “We welcome the creation of the Building Scotland Fund to support innovation in both housing and commercial property development as well as the capitalisation of the Scottish National Investment Bank.  Access to finance remains challenging in a severely risk-averse environment for developers looking to innovate with real estate projects and with the economy set for subdued growth in the next few years, the real estate sector can act as a positive driver of growth that will support jobs and investment in places to work, live and relax.

“The decision to use CPI as the measure of inflation rather than RPI is welcome but we believe that Scottish Ministers should not become tied to increasing business rates by this measure annually as was once the case with the RPI measure.  The economy is growing but only just and we feel that the freedom to increase rates by less than CPI should be considered in future budgets if the economy continues to struggle.

“New commercial development, or redevelopment has the potential to increase and to boost the economy and enhance the tax base.  The confirmation of the support for new build is welcome though we remain concerned that the potential restriction of listed building rate relief will deter the regeneration of listed buildings for business purposes.  This could have significant implications for struggling town centres and clear guidance to local authorities on restricting rate relief will be important.”

The country’s home builders said the Budget recognises economic importance of housing investment.

Chief executive of industry body Homes for Scotland, Nicola Barclay, said: “With home building in Scotland supporting over 60,000 jobs and contributing billions each year to the economy, we are pleased to see the Scottish Government confirming its ambition for the housing of all types our country needs.

“As well as a significant funding increase for affordable housing, the additional funding for skills bodies, colleges and universities that will help to plug the skills gap, is also welcome.

“The Land and Buildings Transaction Tax relief for First Time Buyers up to the first £175,000 of the purchase price could be a valuable boost for those aspiring to get on the property ladder, representing additional money towards their deposit or moving costs. However, given that this is not due to become effective until 2018/19, we are concerned that any delay may have a potential impact on purchasing decisions in the short term.

“Of particular note, however, is the establishment of the new £150m Building Scotland Fund which will have a prominent housing and infrastructure focus to support interventions that will further accelerate and scale up housing delivery. With the funding and delivery of infrastructure a major housing blocker, we keenly await further details in the new year.”

The Scottish Budget also followed Chancellor Phillip Hammond’s lead with a tax break for first-time buyers.

Under the plans, first-time buyers will be given a helping hand with a new land and business transaction tax (LBTT) relief for properties worth up to £175,000. As many as 80% of first-time buyers will now be exempt from paying any of the tax when buying a new home.

The move comes after Chancellor Philip Hammond exempted first time buyers from stamp duty – the equivalent tax in England – for homes up to the value of £300,000. Scottish ministers say lower house prices in Scotland means £175,000 is a roughly comparable figure north of the Border. Mr Mackay said the move will “make home ownership a reality for more of our young people.”

But the move does not go far enough according industry body the Royal Institute of Chartered Surveyors in Scotland (RICS Scotland).

Hew Edgar, RICS policy manager for Scotland, said: “Whilst this change has the potential to stimulate activity in the short term, it comes at a time when the market is subdued, and does not tackle the overarching problem of housing shortage supply across all tenures. This government must realise that prioritising demand side measures is not conducive to market fluidity and will do little to solve the chronic shortage of suitable accommodation across Scotland’s housing options.”

He added: “Once again, we call on Scottish Government to review the current LBTT as a priority going forward as this current framework is not only limiting market activity, but could ultimately bring the market to a standstill. That said, we hope that the ‘Building Scotland’ fund will provide the required support for alternative models of housing delivery.

“On a more positive note, the £600m investment in providing superfast broadband – ensuring the last 5% of Scotland’s ‘non-spot’ dwellings – will be connected to the fourth utility by 2021, will be greatly received.

“As part of £4bn investment in this budget – £1.2bn of which will be directed towards transport – tackling the infrastructure deficit is always welcome. But Mackay held back and gave little away as to where the funding will be directed. He also missed an opportunity to attract and retain top talent to Scotland by not building on Scotland’s infrastructure success of the Queensferry Crossing, with no addition of noteworthy projects to the infrastructure pipeline.”

Innes Smith, chief executive at Springfield Properties, said the announcement was “a positive step forward” for the housebuilding industry in Scotland and for people who need homes.

He added: “With its progressive outlook, the Scottish Government remains determined to improve the housing situation across Scotland. A greater proportion of first-time buyers will be exempt from paying LBTT, making buying a first home more attainable. We are pleased to see the ongoing commitment to funding affordable housing and the large investments in infrastructure and superfast broadband which support the development of new housing.

“We are confident today’s news on LBTT, the Scottish Government’s £756m commitment to affordable housing and funding for further action on homelessness represents real action for those in need.”

Claire Mack, chief executive of Scottish Renewables, said: “The Scottish Government’s continued commitment to renewable energy is of course to be welcomed, particularly as its final Energy Strategy will be published within days.

“It is encouraging that the Government recognises renewable energy as a key driver of Scotland’s economy.

“Of note are the funds allocated to support both low-carbon innovation and the decarbonisation of the heat sector – a task which is of critical importance if we are to tackle climate change.

“We also welcome the reaffirmation of the Government’s intention to follow the suggestions contained in the Barclay Review of business rates and to link increases to the Consumer Prices Index, both of which will benefit new and existing green energy generators. We are pleased that Scottish Renewables’ recommendations on these points have been heeded.

“We will continue to work to understand the full implications of the detail contained in the Budget document for our members and look forward to working with the Scottish Government as the measures outlined in the Budget and upcoming Energy Strategy are implemented.”

Property industry calls for Budget to set platform for growth

David Melhuish

David Melhuish

In advance of this week’s Scottish Budget the Scottish Property Federation (SPF) has pressed finance secretary Derek Mackay on a number of key points designed to help Scotland’s real estate industry support the Scottish economy to grow and thrive.

Given that the government and wider public sector have limited resources over the next few years, the real estate sector body has urged Derek Mackay to create the right conditions to allow private sector investment to come forward to support the economy.

These proposals include:

  1. Further reform of business rates following on from the outcome of the Barclay Review, including a rethink of proposals to remove listed building relief.  This will go some way to supporting the regeneration of town centres, making regeneration projects that include high proportions of older office and housing stock more financially viable.
  2. Ensuring that any business rate bill increases by a maximum of CPI in any given year to support hard-pressed businesses across Scotland, but also to ensure a level playing field with England, which introduced a similar policy during the Chancellor’s recent Budget.
  3. Raising the 10% rate of the Land and Buildings Transaction Tax (LBTT) to a new £500,000 threshold for residential property (as opposed to £325,000), which will address a fall of residential supply to the markets at this level.
  4. A commitment that the proceeds of increases in planning fees for developers will result in increased resources for planning departments across Scotland and that performance must improve ahead of further fees increases.

David Melhuish, director of the Scottish Property Federation, said: “We fully appreciate that this is a Budget where Derek Mackay has very little room for manoeuvre and that’s why we’ve suggested a number of financial tweaks which, whilst not representing a huge swing in policy direction, will have a profoundly positive impact for Scotland’s real estate sector – a key driver in the economy.

“Our members have raised concerns about the implementation of some of the proposals in the Barclay Review, particularly around the removal of listed building relief and we have asked the Cabinet Secretary to think again in this area. Likewise we feel that any annual increase to business rates should be capped at the level of CPI – failure to do so will see Scotland at a competitive disadvantage to our neighbours south of the border.

“We already have data which shows significant drops in sales of residential property valued over £400k and highlights that would-be purchasers are being spooked by high LBTT costs.  The market is sending out a warning signal on LBTT and the Scottish Government would do well to consider amending the threshold in order to support the market and encourage more transactions, and more revenue, over the next year.

“In the week following the publication of the Scottish Government’s Planning Bill we are also asking the Finance Secretary to look again at how resources are deployed to Scotland’s hard pressed planning departments. Since the six-fold increase in planning fees levied upon developers, we are disappointed that local government has yet to make any public commitment to reinvest those increased fees into the planning service, which the higher fees are intended to support.”

Operational delivery ‘key to return on investment’ for Build to Rent in Scotland

A build to rent project is underway at Edinburgh's Fountainbridge

A build to rent project is underway at Edinburgh’s Fountainbridge

Investors into Scotland’s Build to Rent (BTR) sector have been urged to ensure that schemes have operational management factored in from the earliest stages of development.

A new report from residential property management company FirstPort is based on a roundtable meeting involving some of Scotland’s major players in industry and representatives of government.

With significant government backing, the hope is that BTR will attract £500 million of investment and deliver 2,500 private rental homes by 2020 to help address the housing shortage in Scotland.

But, according to Build to Rent in Scotland: Getting it right, across the UK the BTR sector has so far faced challenges establishing itself as a significant element of the housing market.

FirstPort business development manager, Jeremy Ogborne, said: “Build to Rent in Scotland: Getting it right addresses some of the barriers that have slowed investment and delivery in the BTR sector.  The report argues that securing the confidence of investors, of government, and of customers, is key, and that ensuring how the building will operate and serve its local market should be planned in from the beginning.

“The key message is that, in the end, the quality of operational delivery will define a development and the customer experience. In the everyday life of a development it is going to make the difference between efficient and high-quality amenities versus amenities which are disused or deteriorating; the difference between a vibrant community in which residents feel they belong, versus one with dissatisfied, disengaged customers.

“Operational delivery is absolutely key to providing a healthy return on investment for the long-term, reducing customer churn, and maintaining a premium look and feel.

“If a development treats this as an afterthought then it is going to struggle to remain viable, as some BTR developments currently are. There are very few managing agents in the market with the scale necessary to perform this role.

“Now the Scottish Government is calling on the sector to deliver, and with operational expertise, management information and an experienced, skilled workforce all factored in from day one, it can do so.”

Build to Rent in Scotland: Getting it right includes input from Homes for Scotland, Pinsent Masons LLP, the Scottish Futures Trust, the Scottish Property Federation, Montagu Evans, the EDI Group and representatives of the Scottish Government.

Planning Bill published by Scottish Government

planning stockA Bill for an Act of the Scottish Parliament to make provision about how land is developed and used has been introduced by cabinet secretary for communities, social security and equalities, Angela Constance MSP.

The eagerly awaited Planning (Scotland) Bill follows a wide-ranging consultation earlier this year on proposals which aimed to transform the planning system and builds on recommendations of an independent review carried out by a panel of experts last year.

Ministers have insisted the Bill will “improve the system of development planning, give people a greater say in the future of their places and support delivery of planned development”.

Provisions within the Bill include Simplified Planning Zones and proposals to develop an Infrastructure Levy to help support the development of infrastructure to unlock land for development. It also includes a new right for residents to produce their own development plans.

The Bill will strengthen the status of the National Planning Framework, bringing Scottish planning policy within the statutory development plan. It will also remove the requirement to produce strategic development plans and changes the process of producing a local development plan so there is “greater emphasis” on delivering developments.

It will give planning authorities more powers to take enforcement action against unauthorised development. It will also require planning authority staff to undertake training.

An infrastructure levy will be introduced in the bill that will be payable to local authorities and linked to development. This can be used to help pay for infrastructure projects that could incentivise new development.

The Bill’s aims include:

  • Focusing planning, and planners, on delivering the development that communities need “rather than focus on continuous writing of plans that lack a clear route to delivery”
  • Empowering people and communities to get more involved and to have a “real influence” over future development
  • Strengthening the strategic role of planning in co-ordinating and supporting the delivery of infrastructure needed to support development, including “much-needed” housing
  • Reducing complexity, while “improving accountability and trust” in planning processes and decision-making.

In a ministerial statement to the Scottish Parliament yesterday, local government minister Kevin Stewart described how the Bill will create a new structure for a more proactive and enabling system with clearer development plans, earlier engagement with communities, streamlined procedures and smarter resourcing.

Mr Stewart said: “Scotland’s economy needs a world-class planning system. Our planning system must take a strong and confident lead in securing the development of great places that will stand the test of time and this Bill will encourage more people to play an active role in shaping these.

“In addition to restructuring and simplifying the system to provide greater certainty for investors and communities alike it will reflect the importance of development and infrastructure to achieve our ambitions for housing, schools and regeneration – creating jobs and generating economic growth.

“Performance improvement will be formalised so applicants can rely on receiving a consistent service and local authorities will have greater powers to charge for their services. In short, this Bill will reduce bureaucracy so that planners are better equipped to lead high-quality developments that support the economy and enhance our communities.”


Scottish Alliance for People and Places

Rt Hon. Henry McLeish

Rt Hon. Henry McLeish

The Scottish Alliance for People and Places welcomed progress in the Bill and commended the minister’s approach to engagement, but has said the Bill could be more ambitious if it is to achieve the type of transformational culture change that the Scottish Government and the wider sector wants to see.

The Alliance is a collection of organisations working across the place-making and planning sector. Unique in Scotland, the group formed in recognition of the opportunity to build a more inclusive, respected, efficient and ambitious system of planning that puts people at the heart of their places.

The Alliance’s goal is to ensure forthcoming changes to the planning system in Scotland meet the ambitions of communities, the built environment profession and the Scottish economy by working with government, parliament and local communities to articulate a compelling argument for change and develop constructive ideas for how to realise that change.

Speaking following the publication of the Bill, chair of the Scottish Alliance of People and Places, and former First Minister of Scotland, Henry McLeish, said: “We welcome the progress that has been made in the publication of the Planning (Scotland) Bill, and we recognise the significant consultation process that has been undertaken to get us to this point. ​Furthermore, the serious and detailed engagement of the Minister is an exemplar of good governance and we welcome it wholly.

“However, it is our view that there space to build on the Bill’s ambition and this is will be important if we are to achieve our collective goal of a transformational culture change in the planning system.

“In some communities in Scotland, planning is viewed as an imposition – something done to us by big developers in partnership with local government. It’s about our neighbour’s extension. It’s about stopping the development we don’t like, rather than working together to plan the positive developments we want to see – local parks, schools, hospitals, and, crucially, housing. In many other communities, especially in deprived areas, some people may not even know the planning system exists, let alone how to get involved.”

​“We want to see a move to a much more inclusive, holistic and innovative system of planning, where there is systematic and robust engagement with local communities and all stakeholders from the outset and throughout the entire process. This requires a transformational culture change which involves articulating a compelling and positive vision for planning, rather than simply making technical changes.

​“We look forward to working the Scottish Government and Scottish Parliament over the coming months to present constructive and innovative ideas for how we think this can be achieved through the Bill.”

Stefano Smith

Stefano Smith

RTPI Scotland

The professional body for town planners has called for a bold approach when considering the new planning bill for Scotland.

Stefano Smith, convenor of Royal Town Planning Institute Scotland (RTPI Scotland), said: “We said at the outset of the planning review that it was a fantastic opportunity to realise the potential of the planning system and to highlight the important role planning had in creating the types of places we want across Scotland.  Any new planning act must aim to fulfil those initial aspirations of a planning system that delivers infrastructure to enable development and achieve sustainable economic growth.

“The Bill, as introduced, has the right direction of travel and will fix some of the issues faced in planning our cities, towns and villages. However, we question if it is bold enough to make the step change required for a world leading planning system.”

RTPI Scotland believes that there is still an opportunity to do this through ensuring the bill promotes:

  • a new ambitious approach to engaging communities where discussion and debate takes place at the start of the process and is based on what people want their area to be rather than on what they don’t want
  • a more coordinated approach to planning, development and infrastructure through making the National Planning Framework more influential, establishing new statutory Regional Planning Partnerships and taking new approaches to funding infrastructure
  • a planning system that delivers development through capital funding from local authorities and other community planning partners
  • a properly resourced and influential planning service that promotes good place making through establishing a statutory Chief Planning Officer in every local authority
Petra Biberbach

Petra Biberbach

Planning Aid for Scotland

PAS has called on the Scottish Government to be bolder and more ambitious in its Planning Bill in order to realise a more positive, collaborative planning system which carries the trust of local communities and empowers them to actively engage in the decisions about their local places.

PAS is Scotland’s leading place and built environment charity. Its work includes everything from a free planning advice and mentoring service, to tailored training and public engagement events catering for members of the public, planning professionals, local authorities, public bodies, elected members, community groups, young people, volunteers, and for those simply interested in how planning is shaping their environment.

PAS chief executive, Petra Biberbach, sat on the Independent Panel which was set up in September 2015 by Scottish Ministers to review the planning system. The Panel reported its findings in 2016.

Ms Biberbach said: “PAS wants to see a planning system that is much more positive and inclusive. This involves working with local communities, planners and other stakeholders at the very beginning of the planning process in order to encourage a more collaborative approach based on meaningful dialogue and trust.

“This Bill is a real opportunity to bring about a real and meaningful change in the way we engage people in the decisions about their places, and we think the Scottish Government needs to be bolder and more ambitious in its approach. Whilst there is a lot in the Bill around engaging communities earlier in the process that we welcome, there needs to be more detail on how this will achieved and what processes will be in place to ensure that it happens in meaningful way.

“Once we have had the time to fully consider the legislation, we will continue to work with the Scottish Government and Scottish Parliament to outline our ideas on how we think this can be achieved through the legislative process, but we do not think the Bill goes far enough in its present form. We want to see an ambitious planning system fit for a thriving Scotland.”

Hew Edgar

Hew Edgar

RICS Scotland

Hew Edgar, RICS Scotland policy manager, said the Planning Bill “needs to be more ambitious”.

He said: “While the Scottish Government’s approach should be applauded, via the establishment an independent Review of planning and sector-wide engagement, this process has lasted for more than two years. As such, RICS, like most of the sector, had hoped for a more innovative and ground-breaking set of provisions that would provide the necessary changes to cement Scotland’s planning system in the ‘world class’ category.

“There are undoubtedly positive and welcome changes within the Bill that can fix some of the more technical barriers; but overall the Bill needs to be more ambitious. Only then will it make the required changes that will enable the system to be less reactionary, and create a framework that can maximise output in the form of infrastructure, housing, and place-making.

“RICS is a member of the Scottish Alliance for People and Places, and will work the Alliance, Scottish Government and Scottish Parliament to explore constructive ideas that make the whole-sale changes that are required.”

Scottish Property Federation

Andrew Sutherland

Andrew Sutherland

Andrew Sutherland, chairman of the Scottish Property Federation and Joint MD of Miller Developments, said: “The proposals in the Bill deserve a cautious welcome from the Scottish real estate sector. Altogether they hold some promising suggestions to move from a regulatory system to a positive and active enabler of good quality development, with appropriate early engagement and focus on growing the economy to secure new investment and development.  If we are to drive local economic growth, jobs and investment we must have strong public leadership and an efficient, aspirational and delivery-focused planning service.

“However, we continue to hold major reservations over the prospect of a Scottish Infrastructure Levy and further discretionary fees when we are yet to see a step change in performance.

“We look forward to seeing these concerns addressed further if the Bill is fully to realise its potential to unlock development and deliver the much-needed infrastructure for our growing population and business needs.”

Addleshaw Goddard

Sarah Baillie

Sarah Baillie

Sarah Baillie, planning partner at international law firm, Addleshaw Goddard, said: “We are pleased to see the continued commitment to improving the planning system and the introduction of Planning Bill into the Scottish Parliament today. Scotland’s economy needs a flexible, positive and effective planning system, and whilst much work has been undertaken since 2015, we expect that significant questions will be raised during the progress of the Bill. Much information is also still required on the specifics of implementation of new legal and policy mechanisms, even if the Bill does go through.

“The challenge of delivering both more, and good quality housing, and the approach to infrastructure provision is far from resolved – it can’t be left to just the planning system to resolve. Also, if there really is to be a step change from that of a regulator, to a positive and active enabler of good quality development and a shift from reacting to proactively supporting investment and development proposals, then there needs to be a significant cultural change and the Bill alone won’t provide that.

“Local planning authorities need to be adequately resourced in both financial and human terms, and, having graduated with a planning degree, it stems from the grassroots up starting with Scottish universities creating courses that attracts students to continued and adequate professional development and support for the planning profession, to ring-fencing planning application fees for the planning department.

“A Bill committee will now be formed to take evidence and make recommendations and this will provide a real opportunity to participate in the Bill’s legislative scrutiny. We would actively encourage the property industry, planners and other key stakeholders to fully engage, share their innovative ideas, views and opinions with any calls for evidence by the Scottish Parliament.”

Business leaders call for new rates cap in Scottish Budget to support investment

David Melhuish

David Melhuish

Four of Scotland’s leading industry groups – representing manufacturing, commercial property, retail and tourism – have united to challenge the Scottish Government to ensure future increases in business rates rise by no more than CPI, rather than the RPI measure of inflation. A switch from RPI to CPI indexation was endorsed by the recent Barclay Rates Review and – following last week’s UK Budget – is also being introduced for ratepayers in England from next Spring.

Scotland has historically maintained a level playing field with England on the headline business rate poundage. Therefore keeping future rises in Scottish business rates aligned with RPI rather than CPI would put Scottish businesses at a competitive disadvantage compared to firms operating down south, by approximately £25-30 million next year.

Scottish firms operating from medium sized and larger premises already pay more than they would in similar premises in England to the tune of £62 million each year, due to last year’s doubling of the Large Business Rates Supplement.

The four business groups – Scottish EngineeringScottish Property FederationScottish Retail Consortium and the Scottish Tourism Alliance – have combined to speak up in advance of the Scottish Government’s Budget which is expected on 14 December.

David Lonsdale, director of the Scottish Retail Consortium, said: “With shop vacancies increasing and one in every ten retail premises now empty, there is a pressing need to keep down the cost of doing business. Scottish Ministers have said they want to pursue the most competitive business rates regime in the UK, and implementing Barclay’s recommendations on tying uplifts in business rates to CPI rather than RPI would help towards achieving that goal of competitiveness. Such a move would make retailers more confident about investing in new or refurbished shop premises to the benefit of customers and our town centres.”

David Melhuish, director of the Scottish Property Federation, said: “The Scottish Budget offers the government an opportunity to set a sustainable path to supporting business and taking forward the Barclay Review of business rates. With Scottish economic growth sluggish any uplift in the poundage rate must be measured. Even if a 2% rise were to be applied this coming year the fact is ratepayers in medium and larger sized premises would be paying more than 50p in every pound of rateable value applied to their property, and yet we are only in the second year of the current five-year revaluation period. By limiting any poundage increase, the government can begin to bring the overall business rate for large Scottish ratepayers back into line with England, as recommended by Barclay, and at the same time also support smaller Scottish ratepayers.”

Bryan Buchan, chief executive of Scottish Engineering, added: “Given current concerns over forecasted low economic growth and our relatively poor performance in terms of productivity, the government should be doing all it can to stimulate business. Adoption of CPI as the basis of business rates increase calculations would be of assistance and a helpful step forward to achieving a refreshed rates system that offers a real stimulus to new and growing businesses.”

Marc Crothall, chief executive of the Scottish Tourism Alliance, said: “The Scottish Tourism Alliance fully supports calls for increases in the business rates poundage in Scotland to be linked to the CPI from April, following the Chancellor’s announcement last week that firms south of the border will benefit from the lower level of calculation.

“We acknowledge the Scottish Government’s pledge to continue the capping of rateable increases for many tourism firms, however there is still widespread serious concern within the industry around the future cost of business rates despite the short term comfort of the interim cap afforded to some. Indeed business rates remained the number one issue of concern in the STA’s recent research into future confidence within the industry. It is vital that Scotland offers a business environment which is as competitive if not more so than what our industry counterparts enjoy south of the border.”

Commercial property sales now in third quarter of decline

A new canal side housing and commercial development planned for the Fountainbridge area of Edinburgh

A new canal side housing and commercial development planned for the Fountainbridge area of Edinburgh

The total value of commercial property transactions in Scotland fell for the third quarter in a row this year, according to analysis conducted by the Scottish Property Federation (SPF).

The latest commercial property sales figures for Q3 (July – September) 2017, which were released by the Registers of Scotland, show that there was just £693 million worth of sales in Scotland during the quarter, down 12% on Q2 2017.

The number of sales also dipped between Q2 2017 and Q3 2017 with 1,089 commercial property sales in Scotland, down 8% (101 sales).

Furthermore, Q3 2017 saw a big drop in the number of £5m+ commercial properties sold in Scotland, with transactions at this level of the market at their lowest since Q2 2014. There were 22 commercial properties sold at the £5m+ level, securing a total value £332m. This figure is significantly down on the previous quarter (Q2 2017), which saw 32 sales with a combined total of £385m.

David Melhuish, director of the SPF, said: “We have not seen three consecutive quarters of negative growth in commercial real estate sales since 2012 and I think that it is a reminder of just how fragile our market is currently. While investment transactions appear to be slightly stronger than in the same quarter last year, the overall market remains subdued.

“We also need to get more commercial property of the right type and quality into our market and this is where the development process must be efficient and effective.

“With Edinburgh and Glasgow among key locations experiencing high levels of business occupancy we must deliver new commercial property to meet demand.”

Despite the declining figures, property information provider, Costar UK, reported a slight improvement in investment volumes. £416m was invested across all commercial property sectors in Q3 2017, bringing the investment total for the first three quarters of 2017 to £1.57 billion.

The full report can be found here.

Miller Developments MD appointed new Scottish Property Federation chairman

Andrew Sutherland

Andrew Sutherland

The Scottish Property Federation (SPF) has announced joint managing director of Miller Developments, Andrew Sutherland, as its new chairman.

Succeeding current chairman, Paul Curran, who is director of Edinburgh-based Quartermile Developments, Andrew’s new role will commence at the SPF’s Annual Dinner at the Edinburgh International Conference Centre tonight.

Andrew, who will now spearhead the organisation in Scotland, will use his new role to campaign for the best possible regulatory and competitive platform for the real estate sector in Scotland to attract jobs and investment to the country’s built environment. In particular, Andrew will ensure that governments at all levels realise the benefits of boosting commercial property development activity north of the border.

Other elements of Andrew’s 2018 priorities include supporting governments to position Scotland as a competitive location to potential investors and managing ways to reduce the time required to complete developments through engagement with the Scottish Government on its new Planning Bill expected to be introduced to Holyrood shortly.

David Melhuish, director of the SPF, said: “We are delighted Andrew Sutherland is taking up the role of Chairman of the SPF. Paul Curran has had a fantastic year, and Andrew picks up the role at a time of gathering engagement across Holyrood and Whitehall for SPF. His knowledge of planning and development matters working across the UK will be a huge benefit as we tackle the next Scottish Planning Bill.

“We now look forward to working with Andrew over the next year, continuing to strengthen our links with government and producing substantive industry evidence for our members, their investors and government alike, to ensure our own growth strategy benefits the property industry here in Scotland.”

Andrew Sutherland said: “I am extremely pleased to be taking on the role as chairman of the SPF. I want to continue contributing and working hard to represent the interests of Scotland’s commercial and residential markets to attract investors, speed up development times and improve our overall planning strategies.

“Time is one of our biggest issues and I want to see quicker responses for developers looking towards Scotland with an eye on investment.  I’ve been particularly active with planning matters across the UK and am therefore in a good position to compare and contrast planning services to hopefully improve the current situation.

“I’m now looking forward to working with David Melhuish and the rest of the SPF team over the next year, and making a positive change to the industry here in Scotland.”

Andrew hopes to see an increase in the industry contribution to the economy, supported by the campaigns he has been active in as a long-standing member of the SPF board and vice-chair.

These campaigns include: rates incentives for new build and new occupiers announced by finance secretary Derek Mackay, the proposals to improve the planning service, including the resourcing of the planning service and the implementation of the Barclay review of business rates.

Andrew has worked for Miller Developments for more than 30 years, honing his skills in real estate development, contract negotiation and commercial management.

After graduating from University of Edinburgh with a 1st Class honours degree in Civil Engineering, Andrew was responsible for all acquisitions, letting and financing aspects of the Paisley Shopping Centre before joining Miller Developments in 1992.

Throughout his career at Miller Developments he has held a number of directorships within joint venture companies including New Edinburgh Limited, working on the development of 2 1/4 million square feet of offices on the west side of Edinburgh, Edinburgh Park.

Some of Andrew’s other key achievements include responsibility for the following projects: Edinburgh Quay, a £60m regeneration project in joint venture with British Waterways, Omega, a £1 billion office park in Warrington, Arena Central, a £450m office, retail, residential and leisure development in Birmingham City Centre and City Road Basin, a £120m regeneration project in Islington, London.

Andrew is also a member of the Regeneration Committee of the British Property Federation.

Miller Mathieson, MD of CBRE Scotland, will replace Andrew in the role as vice-chairman of the SPF.