The Chairman’s View

30 Aug 2016

Policy area: Development, Finance

Last month’s blog featured the planning system and the report of the Independent Planning Review, in which my predecessor as Chairman, John Hamilton, played a leading role.  Since this time, readers of our weekly update will have seen that the Scottish Government has published an initial 10-point plan to take forward the review's recommendations, a move we have welcomed. 

This month we are focusing on finance, an issue that has become even more prominent since the decision was made to leave the EU.  The SPF has worked hard to explain to the government the importance of investment capital to our industry and its now varied sources.  So, in February we arranged for the First Minister, Nicola Sturgeon, to attend a meeting hosted by LaSalle Investment Management where diverse sources of capital were well represented by US and UK equity, traditional lenders and UK institutional fund managers.  As we know, this capital is highly mobile and therefore the Bank of England's report that foreign capital flows to UK commercial real estate had dropped by 50% earlier this year (before Brexit) is a real cause for concern.

I think it is important that we do not focus all of our market concerns on Brexit - capital allocations and investment decision-making are complicated affairs and subject to a variety of factors.  Our focus and the focus of our government(s) must be on doing everything we can to make Scotland the attractive location for real estate capital that we know it is and can be.

In this respect the SPF has been active in explaining to government the changes in our markets that have occurred over the past few months - but we are also underlining the potential of our sector to make a real difference to Scotland's economic performance right now.

So, together with Paul Curran I have led the SPF discussions with the Finance Secretary, Derek Mackay, to discuss how we reassure investors, look for new opportunities and how the government can support us to create jobs, investment and great places to work, play and live.  This was supported by your feedback to our weekly update call for suggestions on how to reassure investors and attract new investment for the sector.

In many ways our objectives are similar to the government(s) of the day and with this purpose it is important to inform and educate the government - any government - about how our industry works and its role in attracting major investment to our shores.  This brings us back to the need for a Scottish Real Estate Forum that can take a regular high-level industry perspective and inform senior political decision-makers and officials on the realities of our markets and sources of investment.  I am delighted that the Scottish Government has listened to our calls for a standalone forum of senior industry businesses with government representation led by Cabinet Secretary for the Economy Keith Brown MSP.  More informed decision-taking and better government co-ordination of its policies and objectives must be a good thing for both our industry and Scotland plc.

Chris Stewart, Chairman, SPF