A new generation of investors is dominating the resurgent development market in Edinburgh, according to research by GVA James Barr.
The number of schemes on site in the Scottish capital has tripled in three years despite a decline in planning applications, the agent’s triennial Edinburgh city centre development pipeline found.
A total of 12 projects are currently on site compared to four projects the last time the survey was carried out in 2011.
However, the number of planning consents has halved in three years; from 21 schemes consented in 2011 to 12 this year.
The nature of companies pursuing schemes in the city has undergone a radical overhaul, according to GVA James Barr senior director Keith Aitken, as traditional Scottish propcos have been unable to access development finance.
He said: “Now there is a whole host of new players. The current projects are fairly significant and you have to have significant equity behind you to make these things happen.”
Among the schemes on site are Quartermile, Fountainbridge, Haymarket, Waverly and St James, all of which boast gross development values of between £100m and £850m.
The new wave of projects are being financed by international real estate fund managers and US private equity firms.
These include Oaktree Capital, Moorfield, M&G, Standard Life and Hermes, Aitken said.
“These funds appear to have replaced traditional development funding from the main UK clearing banks,” he added.
GVA also found the nature of development in the city had diversified.
