Developers bid to build up a brighter future across Capital

MORE developers are preparing bids to build in the Capital than any other Scottish city, raising hopes that renewed confidence in the construction industry could help kick-start the city's economy.

Developers have notified the city council of their intentions to deliver 26 major new projects in Edinburgh since last August.

Among the schemes being lined up are hundreds of affordable homes and student flats, as well as shops, hotels and offices.

More "proposal of application notices" – the first stage of the planning process for major developments – have been lodged in Edinburgh in the last seven months than Glasgow, Aberdeen and Dundee combined.

Investment experts say the figures offer hope that companies are preparing to develop major schemes for the first time since the recession led to projects across the city grinding to a halt.

However, they say that the public sector is developing much more than the private sector and there are few signs of the return of private housebuilding.

In the last month alone, plans have been lodged for eight major new developments in the Capital – the most in any individual month since last August.

Among them, developer Morbaine is planning to demolish the former B&Q in Longstone and replace it with a major new supermarket, while Edinburgh University has unveiled plans for a massive retail, office and student housing scheme on the site that currently occupies Moray House.

Royal Mail has unveiled plans to turn its former sorting office near Leith Walk into a massive housing scheme, while Liverpool-based Ferndale Estates is to demolish industrial units in Dalry and replace them with 280 student bedrooms.

Councillor Tom Buchanan, the city's economic development leader, said: "There remains a significant amount of investor interest in the Capital.

"Indeed, the fact that Edinburgh has received more application notices than Aberdeen, Dundee and Glasgow combined underlines the Capital's role as the key driver of the Scottish economy.

"Of course, we have just been recognised as Europe's best small city of the future for a second successive year – something I'm sure would-be investors have been interested to hear about."

During a recent real estate fair in France, Cllr Buchanan said there was strong interest in Edinburgh from a range of global firms, including hotel giant Jumeirah.

A series of other economic indicators also suggest that Edinburgh is doing better than many of its rival cities in a range of areas, including new businesses starting up, passengers using Edinburgh Airport, house prices, hotel room occupancy rates and total planning applications lodged.

David Bell, head of planning at property firm Jones Lang LaSalle, said: "It is not a rosy picture everywhere, but these figures indicate a growing interest in development.

"There is a commitment to development from these developers because preparing applications requires a front-loading of information for consultation and that has a cost."

He said that there had been strong interest in hotel development, although that has weakened slightly in the last 18 months. However, he said that while there is interest in developing affordable housing, the private housing market has not recovered.

Out of the 26 projects, only two contain private housing – Foremost Properties' residential and commercial scheme at McDonald Road and the plans for homes and a care home at Newbridge, which were submitted by agent Turley Associates.

The highest profile application is likely to be Primark's plans for a flagship Princes Street store.

Edinburgh-based investment expert Alasdair Humphery said that, despite the wave of new applications, an increase in development in the city might still be several years away. He said: "There has not been an obvious upturn in the commercial property market I operate in. Developers are still being fairly cautious.

"But people have to be entrepreneurial and speculate. The planning process can take a long time, so it may be that many of these developers are planning for two or three years down the line.

"These figures do indicate great resilience and I think Edinburgh is right to shout about them. With rose-tinted glasses on you could see this as an encouraging sign, but the devil is in the detail."

The Edinburgh Chamber of Commerce has campaigned for a better approach to planning issues in the city, including bringing planners and developers around the same table.

Ron Hewitt, the chamber's chief executive, said that better dialogue between planners and developers has helped Edinburgh.

He said: "The worst thing that can happen in a recession is that people stop wanting to invest in your city. The fact that the number of applications is creeping up is a sign that there is a growing confidence in the city.

"The worst victim has been construction. Once construction restarts it will bring jobs and, importantly, more confidence."

BUCKING THE TREND

THE Capital is outperforming rival cities in a range of areas, according to new figures.

The city council's latest Edinburgh Economy Watch shows the average hotel occupancy was at 67.8 per cent in February – better than the average similar-sized UK city.

There was also a 7.2 per cent increase in the number of new businesses being set up in the city. Edinburgh accounted for 19.1 per cent of total office take-up in December – much higher than the 18-month average of 7.9 per cent.

Passenger numbers at Edinburgh Airport increased by 3.5 per cent in February.

House prices in Edinburgh are above average in the last 18 months, at 209,868.

But Edinburgh continues to do poorer than its rivals in terms of city centre footfall, which fell 11.9 per cent in February.

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