Deals: Open to new opportunities

The diverse scope of work Brodies undertakes for our clients based in the Highlands and Islands is testament to the fact it is a region where investment is strong and clients are getting on with business, despite the backdrop of economic head winds, political uncertainty and the impact of the war in Ukraine, writes Karren Smith.

It is hard not to feel a sense of optimism about the opportunities that exist in the region, even while acknowledging some of the challenges in the wider economy. That outlook has led Brodies to new beginnings, as we recently opened our new Highlands and Islands base at Clava House in Inverness’ Cradlehall Business Park.

The Highlands and Islands region has a huge amount to offer, and it continues to attract new regional and international investment that brings fresh and long-term opportunities in sectors such as energy and food and drink.

Demonstrating the region’s global reach, in the food and drink sector, Brodies was appointed by The Tomatin Distillery to provide legal and commercial advice to support a new brand development strategy in the US [see panel].

Photo by Kevin C. Cox/Getty ImagesPhoto by Kevin C. Cox/Getty Images
Photo by Kevin C. Cox/Getty Images

Earlier this year, world-class Canadian golf destination developer Cabot acquired Castle Stuart Golf Links. With plans to develop a second golf course with Castle Stuart as its centrepiece, the Cabot Highlands community will also include homes, retail, restaurants, and communal gathering points.

The hotels sector also continues to attract overseas interest. The Dornoch Hotel in Sutherland was recently acquired by Adventurous Journeys (AJ) Capital Partners, based in Nashville, US. The property, which is currently being refurbished, will join the Marine & Lawn Hotels & Resorts, a collection of bespoke hotels in premier golf locations.

The renewables sector has seen a lot of activity and is a prime example of the size, scale, and potential of the opportunity that Scotland’s natural resources can deliver.

There are many businesses across the renewable energy spectrum that are collectively driving the sector forward, including the Orkney Islands Council community windfarm project, which is worth an estimated £371 million to the local economy.

Karren SmithKarren Smith
Karren Smith

Orkney is also home to Orbital Marine Power, which this year secured substantial new investment and long-term project finance facilities to fundthe ongoing operation of its world-leading O2 tidal turbine, as well as winning two contracts for difference in the UK Allocation Round 4 process.

In Inverness, work is underway on a new multi-million-pound integrated care hub following the Parklands Group buyout of British Growth Fund equity and the refinancing of its facilities. As part of the hub, a 58-bed care home is due to open in 2023.

And land continues to be a highly valuable asset for investors who see opportunity in tourism, property, renewable energy, carbon and forestry, while we are reminded of our region’s ports through the range of commercial projects they are involved in.

We therefore continue to see a real mix of work across sectors, including projects that are ambitious and innovative in their development and approach.

Stephen BremnerStephen Bremner
Stephen Bremner

We at Brodies expect to see activity levels continue, and we remain committed to helping our clients to achieve their objectives.

- Karren Smith is a partner in Brodies rural business team, based in Inverness

Client Q&A: Stephen Bremner, MD of The Tomatin Distillery in Inverness

Where are the main markets for Tomatin?

Our business is primarily focused on the single malt category, which is very buoyant and going through somewhat of a golden period at the moment. This has been the case for a number of years now, but growth has actually accelerated over the last three years as consumers drinking habits changed.

We are exporting to over 60 markets worldwide, but our main focus is on the UK, North America, the EU and Asia. In terms of volume, the US remains our number-one market, however, we have seen significant growth at the premium end of the single malt sector in the UK, and also many of our Asian markets –specifically China, Taiwan and Malaysia.

Explain more about your exports/market strategy in the US

We have a long-standing distribution partnership in the US market which has been very fruitful for us over the years.

It has been very satisfying to see the market stabilise and return to growth since the US administration lifted the 25 per cent tariff on single malt Scotch whisky.

We see lots of opportunities to develop our Tomatin brand in the US market as consumer interest in single malt continues to grow.

What are the global challenges and opportunities for Tomatin and Scottish whisky in general?

There are still a lot of challenges within the supply chain and getting product to market isn’t easy. Ever-increasing costs pose a significant risk to demand, and it’s really difficult to predict how the consumer is going to react over the next 12 months.

Medium to long-term, we think the single malt category will continue to grow, but in order to meet increasing future demand we need to invest heavily now – which brings its own set of challenges.

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