City centres will soon reverse decline caused by pandemic

Barry McKeown, partner and newly appointed head of Shoosmiths' Glasgow office. Picture: Suzanne Heffron

Built in 1898 and sympathetically repurposed to reflect 21st century business and lifestyle needs, the imposing building aligns with Shoosmiths’ values and our need for flexible and agile working space.

As a UK-wide law firm, the deal also underlines Shoosmiths’ bold strategic thinking as we commit to support a solid existing client base and maximise further opportunities in the west of Scotland.

Of course, it’s right to ponder if the Garment Factory model, developed in a pre-pandemic world, is typical of the new commercial and leisure spaces envisioned for Scotland’s cities. For unquestionably, the past 18 months has seen accelerated demand for agile / home working. Footfall in city centres has dramatically fallen, adversely impacting on commercial operators, leaving many empty highly visible spaces on high streets.

Yet in my opinion, many city centres, the lifeblood of the commercial property sector and increasingly a major focus for residential developments too, will soon reverse the recent decline in footfall. Allied to this, I believe that with a step-change in thinking, we can anticipate more repurposing of existing attractive building stock like the Garment Factory.

In part, this confident note is inspired by the steady upswing curve in the number of large office lettings over the summer in both Glasgow and Edinburgh. These reflect a growing demand for a return to office places of work by many. Indeed, occupiers are removing space from the ‘grey market’ as they reconsider downsizing plans in response to staff consultations.

Consider too that several key city centre Build-to-Rent (BTR) led developments are also well under way. This includes the completion of the first phase of the Moda development at Fountainbridge in Edinburgh, the Candleriggs Square development in Glasgow by Drums Group and Watkin Jones’ Portcullis House redevelopment of 750 BTR units advancing through Glasgow’s planning process. Collectively, these will help bring people and jobs back to our inner cities.

Of course, new build offices and large city centre mixed use projects are nothing new. Investor appetite is always there for top quality development projects underpinned by strong occupier covenants and incorporating increasingly important green credentials, with sustainability at the core of design and operation.

As these new developments take shape, we mustn’t overlook the importance of utilising existing building stock within city centre infrastructure and development plans. For old and new spaces must co-exist to ensure city centres thrive. Investor appetite is certainly dulled if an old empty sandstone office block sits opposite a shiny new office development! So we need to be bold in thinking how grand old buildings and new sites can be embraced to help future-proof a cities residential, commercial and lifestyle spaces.

With COP 26 coming to Glasgow this November, can more political and central and local government support be brought to bear to meet energy efficiency and decarbonisation agendas and revolutionise our city centres? Crucially, in my opinion this should include finding ways to deliver new sustainable refurbishment and redevelopment opportunities for neglected city centre areas.

For example, the Scottish Government, via the Scottish Futures Trust has already been working on the development of net zero carbon public buildings standards to enable new build and major refurbishment construction projects to achieve net zero carbon by 2045. Aligned to the £3.4bn hub social infrastructure programme, can such government support be extended to support private sector regeneration opportunities via grants or new forms of tax incentive? For example, perhaps a refocused form of business premises renovation relief or capital allowances regime aimed at city centre urban regeneration and meeting new zero carbon standards?

Many cities have semi-derelict, once grand architectural buildings. However, private sector investors are reticent to risk developing such sites without some form of incentive that provides financial support to refurbish and upgrade building stock that forms part of our cultural heritage.

Sustainable new office, residential and leisure developments are to be embraced. However, we also need bold thinking to enable investment in the old stock that are testament to the rich cultural heritage and place-making of our proud cities.

Barry McKeown is a real estate partner and head of the Glasgow office for Shoosmiths in Scotland

City centres will soon reverse decline caused by pandemic - Barry McKeown