SCOTLAND is in prime position to benefit from London’s overheating property market with Edinburgh listed among the top three European cities in which to invest, according to property experts.
Lack of supply in large prime-property markets, such as London, and rapid re-pricing in recovering markets, such as Spain, mean investors are looking to mid-size European cities for value.
Analysis from property consultancy CBRE has shown that Edinburgh features in a list of European cities where investors can capitalise on growing employment, a stable economy and established office markets.
Scotland is also to benefit with major developments due to get under way, including Edinburgh’s St James Quarter, Haymarket and Caltongate. Glasgow is well primed following redevelopment ahead of the Commonwealth Games, while Aberdeen is pushing ahead thanks to its oil-fuelled boom and Dundee is also moving forward with ambitious Waterfront proposals that will reshape the city.
Meanwhile, London, has become the most expensive city for companies looking to relocate staff.
A recent study by estate agents Savills has found the total cost of renting residential and office accommodation is higher than in any other world city, at more than £100,000 per employee per year. This is a 5.3 per cent rise since last year and a massive 38.7 per cent increase since 2008.
Hugh Rutherford, the chairman of the Edinburgh Business Forum and managing partner of property firm Montagu Evans, said: “In terms of timing, the recession hit Scotland at a time of significant development; funding just dried up. But investors out of London are now once again looking at value of money and Scotland is primed to capitalise.
“There are definite green shoots of recovery. Development in Edinburgh is picking up while in Glasgow the Commonwealth Games and the subsidies that brought have allowed developers to build.”
In Edinburgh, office-based employment grew throughout the recession despite cutbacks in banking and financial sector jobs. Between 2010 and 2012, 23,100 private sector jobs were created, a growth of 11 per cent, offsetting a 3.5 per cent reduction (3,330) in public sector roles, making it the second fastest growing employment centre in the UK.
Miller Mathieson, managing director of CBRE in Scotland, said: “Investors already consider Edinburgh a popular place to invest and this looks set to continue.”
1 Bologna, Italy
2 Malaga, Spain
4 Nuremberg, Germany
5 M25 North/Cambridge
6 Toulouse, France
7 Hauts-de-Seine, France
8 Turin, Italy
9 Karlsruhe, Germany
10 Cologne, Germany