In a world where convenience is king and time is increasingly of the essence, we are seeing the beginning of an evolution in property development.
With an ageing population and growing economy on one hand and a need to limit urban sprawl whilst maximising sustainability on the other, the age old story of demand versus supply imbalance continues across the market despite a healthy appetite from developers, occupiers and funders alike. The story continues with brownfield land, in many areas remaining undeveloped due to upfront remediation costs and extended timescales weighing on fragile cashflows regardless of sites being cheap across Scotland comparative to other UK regional counterparts.
The support offered through government initiatives such as the City Deal, Enterprise Areas and Business Improvement Districts most certainly aides in regeneration, particularly upfront expenditure and infrastructure costs, the speed of which the capital is deployed is behind the pace of our impatient market.
Technology and innovation are driving demand in a particular direction, toward urbanisation and more specifically mixed use development. Occupiers demand an increasingly level of convenience whilst planning policy requires improved infrastructure and greening of streetscapes bringing masterplanning, placemaking and the need for mixed use communities to the forefront of the development industry.
This need however for mixed use development is not simply occupier driven. The presence of uncertainty, particularly in Scotland and impatience of equity providers who require shorter term returns on capital is causing a development funding gap. This gap is exaggerated in single use schemes, where developers are battling to find the balance between suitable scale to create development viability without diluting the micro market with an over-supply of a single product.
The creation of mixed use 24 hour live-work environments, not only answers the demands of modern living but reduces risk and eases cash flows through diversification and in turn increases funding opportunities.
A joined up and longer term approach is require to make a success of prime, large scale development opportunities and encourage inward investment into the regional market. Whilst the next generation of mixed use development is in its infancy across Scotland in many respects, we are witnessing a handful of mixed use schemes leading the way.
The Mill Quarter, a landmark £30m project in Perth will establish a mix of restaurants and bars, speciality shops, a cinema, gym, housing, and a multi storey car park. It forms a cornerstone of the City’s wider plans to establish a new cultural quarter in the city centre. The project led by property developers Expresso, is an excellent example of the public and private sectors working together to maximise community benefit. The project was secured by Perth and Kinross Council and helped by collaborative marketing undertaken by the Scottish Cities Alliance, a partnership between Scotland’s seven cities and the Scottish Government. Savills act as Strategic Development advisors to Expresso.
The University of Glasgow have recently submitted Planning Permission in Principle for the redevelopment of the 14 acre former Western Infirmary Site. Plans include roughly 800,000sq/ft of academic accommodation including new learning and teaching spaces, research hub and buildings for the arts, social science, the institute of wellbeing as well as science and the institute of infectious diseases. The Masterplan includes supporting commercial uses, strengthening the link between Byers Road with Dumbarton Road opening up the whole area and creating a new central square to encourage both the community and university to move through the campus.
Savills mixed use development team specialise in the delivery of regenerative and infrastructure led schemes across the UK working with the education, public and private sectors. Will specialists in acquisition, planning, funding, development, agency and disposal across both the residential and commercial sectors, Savills are the only international business based in Scotland able to offer a full spectrum of expert advise under one roof