What makes Scotland's cities more investible - Alasdair Humphery

Occupiers of real estate across Scotland are becoming increasingly focused on what they want from a property as returns become increasingly polarised. This is most obvious when different property sectors are compared.
Alasdair Humphery , JLL - EdinburghAlasdair Humphery , JLL - Edinburgh
Alasdair Humphery , JLL - Edinburgh

To get a more accurate picture of what specific factors are driving competition for the most attractive places to live and work, we recently carried out research titled, What Makes An Investible Place?

As fantastic as having an award-winning structure or panoramic city views can be, it just isn’t enough nowadays. We need to go beyond the traditional model of real estate and really work alongside investors to address their long-term needs.

Where can value be added?

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We have identified the nine key factors as the key property fundamentals for individual buildings or large-scale schemes. These include environmental responsibility, community, adaptability and health & wellbeing. Incorporating each factor will be key to the long-term success of the real estate industry.

Changing attitudes

Accelerated by the pandemic, people are becoming more discerning to the narrative a building and its surroundings provide. Of course, Environmental, Social and Governance (ESG) factors are key motivators, but we’re also seeing other demands emerge since the start of the pandemic.

For example, as hybrid working continues for some, many employees are looking for homes with dedicated office space while employers want better ventilated buildings following the initial Covid-19 outbreak.

To keep up with demand, investors in Scotland need to look beyond bricks and mortar and start to address these other factors. This is particularly important in Scotland where many buildings are listed, and retrofitting will take time. But if we act now, we can create the changes needed for long-term success.

Health and wellbeing

In Edinburgh, we’re already seeing developments take on board these attributes in order to become more investible. Take The McEwan Moda development for example. This is the largest build-to-rent scheme in the capital, and the first to be explicitly focused on health & wellbeing.

Located in the city’s Fountainbridge area, the 476-unit build features 45,000 sq ft of amenity space including a gym, indoor and outdoor fitness classes, wellbeing workshops, co-working space and landscaped gardens and terraces.

Now, health and wellbeing was already moving rapidly up the list of occupier and resident requirements before the pandemic hit, but the experience of lockdown and remote working has heightened its importance.

We’re likely to see this trend continue well beyond the pandemic as investors realise the benefits to their health & wellbeing.

Sustainability

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Sustainability is also a significant consideration we’re seeing developers increasingly adopt. For example, the Parabola building at 1 New Park Square in the heart of Edinburgh Park is powered by 100 per cent renewable energy through an all-electric infrastructure and has biosolar PV arrays on the roof.

With the country pushing to achieve Net Zero by 2045, demand for buildings like this is on the rise as investors strive to cut their carbon footprint.

Let’s think long-term

Scotland’s real estate is impressive but with a huge stock of older buildings, firms must start addressing change now. Businesses and landlords need to collaborate and identify improvements that will have the biggest impact to generate the most value.

There’s a significant amount of change happening right now, but I’m confident that those who can excel in achieving the nine key fundamentals will find it easier to source and secure new opportunities in the future.

Alasdair Humphery, head of Scotland at JLL

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