Chairman’s Blog – June 2017

7 Jun 2017

After two recent journeys to London on SPF business, it remains abundantly clear that the city remains the premier capital market for property in Europe.  These trips have been informative and again serve to highlight the importance of the key issues that SPF is addressing right now with the Scottish Government.  Firstly, government and wider public leadership are showing greater awareness of the need to reach out to the capital markets to attract investment to Scotland.  Quite simply overseas or UK capital is vital to our real estate industry and much of the Scottish market is reliant upon it.

Secondly we know that political uncertainty, whether its elections, Brexit, or IndyRef2, does not help to secure investment, how could it?  However, there are market fundamentals and new markets across the country that offer opportunity and we must not forget this.  Office development has been arguably under supplied in our largest cities for a number of years and there is stable take-up in smaller industrial units.  The growth of Edinburgh in the fintech and hospitality sector remains strong.  The continued shortage of housing supply also offers opportunities for new styles of residential markets in Build to Rent and the ongoing expansion of Scotland’s university sector continues to drive demand for quality student accommodation.  With all these factors it is clear that the Scottish market can be an attractive proposition for investors.

It is therefore all the more important therefore for our authorities and government to provide us with the best tax and regulatory frameworks, offering certainty and predictability for investors, developers and wider realm state community.  Scottish real estate remains attractive to overseas investors but longer term political and economic uncertainty has the potential to impact investor appetite.  We must act to counter any such loss of confidence through retaining a positive tax and legal system.  It is clear also that we must do more to bolster domestic UK investment in Scotland.  This in turn could be expected to support further overseas confidence in the Scottish markets.

Everyone in the real estate sector has a stake in ensuring decision making at every level is based on a solid understanding of the facts and data is joined up.  The Scottish Real Estate Forum, championed by SPF, provides an opportunity to do this at the central government level, as well as to air upcoming policy initiatives.  The key message that it and the SPF have for our political leaders is that real estate is an industry with the capacity to bring a high impact of new jobs, investment and economic growth - this is crucially important for Scotland to achieve if we are to grow our tax base and boost public revenues and services.