Commercial property ‘in need of fresh support from government’

INDUSTRY leaders have today issued a five-point action plan to inject life into Scotland’s flagging commercial property market amid a dramatic slump in orders.

The Scottish Property Federation (SPF) urged Holyrood to work with the industry “to do everything it possibly can” to help unlock its potential for economic growth.

It made the plea as research revealed that orders for commercial development and repair work have fallen by a third since 2007, before the downturn.

The slide is estimated to have cost the wider Scottish economy some £2 billion of lost economic output and thousands of jobs.

Among the measures being demanded by the SPF are a “step change” in reforming the planning system, a freeze in the cost of empty property rates, “incentives to support economic development” and fresh infrastructure investment “to boost the economy”.

It is also calling for “pragmatic climate change regulations” to improve the energy efficiency of homes and business premises – an area that strays into UK government territory.

Speaking ahead of the SPF’s annual conference in Edinburgh, the federation’s chairman, David Peck, said: “Commercial property is an important bellwether for the Scottish economy. The health of the industry is down by every measure – be it new orders, sales or lettings.

“Government support for initiatives such as tax increment financing and encouraging flexible developer contributions policies by local authorities is very welcome, but we are asking the government to go further to boost confidence in this key sector.”

He added: “The commercial property industry has been hit harder than most sectors during this recession, losing around a third of its workforce and reducing its contribution to the economy by more than £2bn. The SPF is urging the Scottish Government to do what it can to help us unlock economic growth and development.”

The SPF highlighted research by Warwick University that suggests that as many as one in four SMEs operating in the sector believe they will be out of business by 2014.

Infrastructure secretary Alex Neil, who was due to address delegates as the keynote speaker, said: “The property sector plays a key role in Scotland’s economic fortunes. That is why we are taking every action we can to drive the economy and assist the property sector on the ground.”

More than 200 delegates are expected at the annual conference.