Edinburgh fits the bill as Europe’s property investors seek alternatives

Miller Mathieson
Miller Mathieson

Property experts have listed Edinburgh in the top three of European cities to invest in.

Analysis from property consultancy CBRE cited Scotland as being in prime position to benefit from London’s overheating property market and a lack of supply in large prime property markets together with rapid re-pricing in recovering markets, such as Spain.

The news follows a new map of major developments in the centre of Edinburgh by GVA James Barr which revealed the city is a hotbed of activity on the property scene.

CBRE said investors are looking to mid-size European cities for value and Edinburgh with its growing employment, stable economy and established office markets is an attractive proposition.

Glasgow is well primed following redevelopment ahead of the Commonwealth Games, while Aberdeen is pushing ahead thanks to its oil-fuelled boom and Dundee is also moving forward with ambitious Waterfront proposals that will reshape the city.

Miller Mathieson, managing director of CBRE in Scotland, said: “Investors already consider Edinburgh a popular place to invest and this looks set to continue.”

Hugh Rutherford, the chairman of the Edinburgh Business Forum and managing partner of property firm Montagu Evans, said: “In terms of timing, the recession hit Scotland at a time of significant development; funding just dried up. But investors out of London are now once again looking at value of money and Scotland is primed to ­capitalise.

“There are definite green shoots of recovery. Development in Edinburgh is picking up while in Glasgow the Commonwealth Games and the subsidies that brought have allowed developers to build.”

Meanwhile a report from GVA James Barr has revealed that the number of developments under construction in Edinburgh has trebled since 2011.

Keith Aitken, head of the Edinburgh office of consultants GVA James Barr, pinpointed the Quartermile development at the site of the old Royal Infirmary, the Atria next to the Edinburgh International Conference Centre in Morrison Street, and student developments at Fountainbridge as among the most significant.

He said there were clusters of activity across the city centre, including St James Quarter and Haymarket but he also highlighted the major Caltongate project, now renamed New Waverley, in the heart of the Old Town. Demolition recently began in East Market Street to make way for two hotels as part of the £150m development, which also includes offices, shops, a new public square and 180 homes.

Mr Aitken said the trams would eventually give a boost to development both at Haymarket and the East End.

He said: “The most notable addition to Edinburgh has been the much-maligned tram network leading from York Place to the airport. This is now fully operational and in June and July attracted 90,000 customers per week.

“In time, we believe the tram will benefit development at Haymarket and in the East End of the city around St Andrew Square.”

But he said large-scale development activity along Princes Street and within the “golden rectangle” – bounded by Charlotte Square, St Andrew Square, Princes Street and Queen Street – had been very limited since 2011.

Predicting a recovery in the office market, Mr Aitken said: “The fact hotels and serviced apartments have been able to compete with offices is interesting, but as the office market improves and catches up with the other UK centres of Manchester and Birmingham, we will see offices start to outperform theses uses.”

He said 11 of the consented or proposed schemes included office space. “This is slightly lower than anticipated and only three of these schemes are actually on-site – 3-8 St Andrew Square, Quartermile 4 and The Haymarket.”

Further office development was required to satisfy demand, he added. “We foresee this taking place at Fountain South, New Waverley and through further office development at Quartermile.”

Mr Aitken said student accommodation has been the most active sector with nine projects either completed, under construction or with planning consent extending to approximately 3700 new beds to accommodate city students.

Meanwhile, the retail sector was dominated by the St James Quarter plans, where TIAA Henderson Real Estate is proposing to start on site in March.

Mr Aitken said: “This is a major four-year project and will transform the retail scene in Edinburgh. A pre-letting campaign is now under way and together with the new Apple store , will serve to swing the prime pitch in retail towards the East End of the city centre.”

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