Glasgow isn’t alone in its ambition. In this post-pandemic world, the challenge for local authorities, developers, investors, and retailers is to make Scotland’s city centres attractive places in which to live, play and work. Enticing more office workers back into city centres is important. However, from a real estate perspective, the challenge is also to provide potential inner-city residents with a blend of appealing, energy-efficient mixed-use developments that offer access to sustainable transport, their places of work, leisure and retail experiences.

From plans to physical builds, this transformation is already taking place. In Glasgow, there are proposals for Buchanan Galleries to redevelop as a huge mixed-use scheme and St Enoch has the same idea with a mix of Build-to-Rent (BTR), residential, leisure and commercial units. Dundee has its acclaimed V&A and Waterfront project while in Edinburgh we have seen the opening of the St James Quarter and impressive redevelopment at Haymarket.

Developers see this as the future. Crucially, to fund their public services, local authorities also recognise they must find ways to attract more residents to live and work in the city centre. This is reflected in Glasgow City Council’s £115m Avenue Programme. Delivered through City Deal investment, the ‘People First Zone’ is being used to re-imagine parts of the city with people, not vehicles, having priority in placemaking. Such ambition is helping to create a living environment where people want to spend time living and working, not simply commuting from outlying areas.

Barry McKeown is a real estate partner, Shoosmiths

However, this ambition presents significant challenges.

Attractive new mix-use developments in city centres, with work and leisure opportunities close to hand will appeal to a younger demographic. To attract the likes of families, there’s also the need to offer a greater choice of services, including dentists, GP surgeries and schools.

As part of a leading real estate practice, Shoosmiths interacts continuously with planners, real estate developers, investors, and council officials. A further challenge is to ensure that the local planning system has the investment, human resource and strategic direction to keep pace with the vision to re-imagine our inner-city landscapes.

Interlinked is the need for accommodation and office space to be effectively insulated and energy efficient. Fortunately, legislation and a wider ESG (Environmental, Social and Governance) focus, help to ensure Scotland’s new housing stock and commercial property – including Shoosmiths new office at Haymarket Edinburgh – are built to much improved energy efficiency and sustainability standards.

However, a key hurdle is the cost of retrofitting or refurbishing older housing and commercial stock to meet new energy efficiency standards. Even at conservative estimates, this is billions of pounds. Without major support from central government or the reintroduction of a system like Business Premises Renovation Allowance (BPRA) that incentivises private sector investment, there’s a risk of insufficient funding being available to positively retrofit older real estate stock.

This is a fundamental challenge to re-imagine inner-city landscapes. Without incentives to encourage the repurposing of housing and commercial property stock – including derelict buildings – we may have a scenario whereby super-sustainable new buildings sit adjacent to unsightly derelict or neglected stock. This will create city centre areas that are disjointed and potentially deter people from choosing to live, work and play in an inner-city community.

Barry McKeown is a real estate partner, Shoosmiths

Inner-city regeneration faces major challenges - Barry McKeown