Future of Scottish Cities: A metamorphosis in action

If you Google ‘What is Scotland famous for?’, its key cities of Glasgow and Edinburgh will come top of the list, followed by its majestic Highland mountains, fine whisky and some potentially questionable traditional foods. These may be what Google highlights, but in built environment terms, Scotland is fast becoming famous for being a place of transformation. Glasgow (pictured), fresh from hosting COP26, hopes to bring about change on a global scale through facilitating conversations across nations and bringing individuals and businesses alike together to focus on the actions needed to get to net zero carbon. A lot of that work will need to start at home, transforming the city through its £30bn greenprint, and bringing life back to the city centre. Edinburgh, too, is working hard to regenerate its city centre, with huge repurposing projects aiming to bring some shine back to Princes Street. And in Aberdeen, famed for its oil and gas industry, the city must completely transform to be a beacon of Scotland’s sustainability credentials. As host city to COP26 this month, all eyes were firmly on Glasgow and the city has taken advantage of that attention to focus on its own green credentials and revival. In September, the city launched its greenprint for investment prospectus, a £30bn mix of market-ready opportunities for private capital to invest in Glasgow. The prospectus, which includes a Glasgow metro, expanding the Clyde Climate Forest by 9,000ha and a city-wide retrofit programme to make all homes energy efficient, is key to the city meeting its 2030 target for a net zero carbon economy. Susan Aitkin, leader of Glasgow City Council, said that for the city to meet the challenges of the climate emergency head-on, it would require levels of investment “never seen before” in local government. “All cities face huge change,” she said, launching the prospectus. “Glasgow’s challenges are typical of those of so many of our global peers. As cities rebuild to decarbonise, we can be the demonstrator in shaping those solutions… our greenprint provides the roadmap to doing just that.” Barry McKeown, partner and head of Shoosmiths’ Glasgow office, says the greenprint “speaks to the heart” of where the city wants to be in the future – a pioneer and a showcase for sustainability. Pushing the agenda And it is not just Glasgow that wants to lead when it comes to sustainability, adds Sheelagh Cooley, a partner in the real estate division at Shoosmiths. Edinburgh, Aberdeen and the Highland councils too are pushing the green agenda. In Edinburgh, the city council has just put its City Plan 2030 out for consultation. The proposed plan sets out the strategy for development, proposals and policies to shape development and inform planning decisions over the next decade and beyond. The environment, inevitably, plays a major role. So too does repurposing of stock. A walk down Princes Street in Edinburgh is a little sad today. This once-bustling retail street is now plagued with empty units. But many are being brought back to life in different guises. The old House of Fraser store has been turned into the Johnny Walker experience, at 109, Legal & General Investment Management has got the go-ahead to transform the redundant Debenhams into a £50m hotel and at number 64, LaSalle Investment Management is planning to turn the former BHS into a leisure destination complete with bowling alleys, mini-golf, ping-pong and curling. “Edinburgh has been going through quite a big transition on Princes Street,” says Savills associate director Danielle Corker. “A number of vacancies have now appeared and this is where repurposing has really had to come forward.” Princes Street has historically been a retail destination, says Corker, but the changing nature of retail, coupled with the impact of Covid, has forced the street and its landlords to transition. They are now trying to bring the night-time economy, leisure and city centre living to the street. “The future has to be through mixed-use and collaborating with public and private funding to bring it back to life,” adds Shoosmiths’ Cooley, “and we need to make sure we don’t rely on one thing too heavily.” The F word The transformation of Scotland’s cities runs through to its office market too. How occupiers plan to use office space in the future has been one of the biggest themes of the past 18 months and, according to RSM UK partner Claire Monaghan, it is set to continue. She cites the firm’s recent Real Estate 360 Survey, which found that some 60% of respondents thought demand for office space would decline over the next two years, with the shift to a flex offering becoming ever more popular. “Flexibility is probably one of the most important words in real estate at the moment, because that’s what everybody is looking for going forward in terms of what a building needs to deliver,” says Monaghan. “We’re starting to see change in the sector, with some of the bigger players already looking to move office. They have analysed what floorspace they need, what the office needs to deliver and have started to make a move.” That changing view of the office is also leading through to investment decisions, says Monaghan, with a switch in the most active spenders from private high-net-worth individuals to the more patient capital of the funds, which are able to spread risk easier across diverse portfolios. But the office is far from dead. And neither is the high street. It is merely transforming and learning to be something different. And when it comes to Scotland, no place can identify more with that than Aberdeen. The city is working hard to transform itself into a pioneer in green energy. “There’s quite a lot of excitement around Aberdeen at the moment,” says Savills associate director Claire Herriot, citing the government’s recent investment of £27m into an energy transition zone next to the city’s new £350m deep-water harbour, and a further £6.5m towards a new global underwater hub. “Those two initiatives are the first steps in Aberdeen and the north east achieving this ambition to be a global centre for energy transition and leading the way in this field,” says Herriot. That transition from dirty oil to green energy is just one piece of Aberdeen’s transformation. Last month, plans were submitted to redevelop its markets, creating an international food and drinks destination as part of the council’s efforts to bring business, tourism and life back to the city. But it will be its transition to a renewable energy industry that ultimately puts Aberdeen back on the map. “If Aberdeen wants to continue to attract renewable occupiers, we need to be delivering equally energy-efficient buildings and top-class facilities,” says Herriot. “We hope that the energy transition zone will accelerate this and will filter through to the other landlords in the city where buildings are being repurposed and reconfigured and we hope that Aberdeen will become a more attractive place for investors.” Whether it is Aberdeen, Edinburgh, Glasgow or any of the country’s major conurbation, change is coming. A shift to sustainability, for the environment or for the life and soul of its cities to remain, is clearly what the future of Scottish cities holds. Feeding Scotland’s industrial demand Like the rest of the UK, demand for logistics space in Scotland is outpacing supply, but Scarborough Group’s Queensferry One in Fife is hoping to help rebalance the situation. Ross Jubin, investment and development consultant for Scarborough, says logistics occupiers aren’t just looking for more space, they are looking for bigger space. Over the past few years, he says a “big” requirement has shifted from 100,000 sq ft to 400,000 to 500,000 sq ft, with everything in between still being high in demand. At Queensferry One, Jubin hopes that its 120 acres of masterplanned brownfield development land will be able to service demand. “One thing we are finding across the central belt of Scotland is that availability is really low – sub 5%,” says Jubin. “Sites that can accommodate the larger requirements are going to be in short supply as we go forward and, therefore, the competition will start increasing. Land values as a result will continue to rise and be more on a par with where they are across the rest of the UK.” He says the firm is confident that it has timed its development just right, with the market now very much in its favour. “For this kind of site,” he says, “we’re looking at minimum requirements that are going to take 20-30 acres-plus, which means it will be a huge catalyst for this site and all the development sites around.”   To send feedback, e-mail samantha.mcclary@eg.co.uk or tweet @samanthamcclary or @EGPropertyNews Picture © Lux_Aeterna/Pixabay