Scotland’s commercial property sector has undergone some significant changes in the last five years. The Covid-19 pandemic, changing working patterns, and new legislation – not to mention geopolitical uncertainty – are just a handful of the issues that have had their influence in different ways.

One of the most enduring consequences of those events for property has undoubtedly been the effect on project viability. Stubbornly high inflation has pushed the cost of development up significantly. While that has stymied new supply, helping to push rents up in Edinburgh and Glasgow, that benefit has been more than offset by softening yields and cost increases in both construction and funding costs.

At the same time, we have seen a flight to quality – particularly in the office sector. Occupiers are increasingly looking for space that has the ESG credentials to match their strategies, and access to the best amenities. All of this requires significant investment and, combined with the macro backdrop, the upshot is that many new-build schemes, and refurbishment projects, have been rendered unfeasible.

It is unsurprising, then, that we have seen few new developments coming out of the ground. With that comes the risk of stagnation – the property sector is one of Scotland’s key economic drivers, with a huge multiplier effect. Analysis from the Fraser of Allander Institute from 2018 found that for every £100 million of ‘new commercial work’ – its definition of the industry’s impact – another £73m is created in the wider economy.

Our 177 Bothwell Street in Glasgow was a case in point. The independent economic impact assessment carried out to capture its contribution to the city and broader Scottish economy found that it would deliver £2.8 billion in gross value added (GVA) over 25 years, from the jobs created during construction through to the local firms supported by the major corporate occupiers basing themselves at the building.

What’s more, an office is essentially a home for a business. If they do not have the right accommodation to support how they operate and function, that firm will not perform to its full potential and productivity – already an ongoing challenge for the UK, as a whole – will dip.

Amid the challenges of recent years, there have still been some notable success stories in UK cities. Manchester is a standout example, and anyone visiting can see how much new development there has been and the positive impact this has had, with the city predicted to outpace the national growth rate.

Closer to home, Dundee is widely seen as a great example of how a city can deliver a strategy for transformation. Property is at the heart of those plans, with the Eden Project perhaps the highest-profile example, alongside a new e-sports arena and Life Sciences Innovation District.

What these two cities have in common is the engagement between public and private sector. For instance, Manchester City Council included three representatives from the private sector on the seven-person interview panel for its new development director. Dundee has engaged extensively with the property industry, listened to what’s required in support of the city’s plans, and taken action to make that happen.

Ultimately, if we’re not developing then we’re not growing. And if we’re not growing, we’re going backwards. The progress we’ve seen in Manchester and Dundee is replicable elsewhere – all we need to do is have the will, drive, and collaborative approach to deliver it.

Stephen Lewis is managing director of HFD Property