George Redmond, executive member for jobs, business and investment at Glasgow council, is clear why the city is at MIPIM.
“Glasgow is one the UK’s hottest property markets and 2016 is set to be a bumper year for investment with City Deal projects starting in earnest,” he says. “We have a number of high-profile projects to promote with high-yield opportunities. Several City Deal projects have also been approved and are ready to commence.”
The Glasgow City Region City Deal is worth £1.13bn and will come to market in 2016. Invest Glasgow describes it as a “once-in-a-generation investment opportunity” that will lever £3.3bn of private investment and will transform the city region. Hopes are high that it will give Glasgow and the Clyde Valley a permanent annual uplift in its GVA of £2.2bn, generate 15,000 jobs during the construction phase and 28,000 permanent additional jobs.
Securing that is why the city is taking this MIPIM so seriously.
“Glasgow’s attendance at MIPIM allows us to promote the city to a global audience and connect with future partners,” says Anne Murray, head of Invest Glasgow.
Even before the deal delivers, Glasgow is experiencing significant demand for new grade-A office space. Titan Investors and HFD Group are among those behind the activity. They are expected to bring forward major speculative office schemes to kick off the next wave of development in Glasgow city centre. From residential to leisure, others are poised.
“The city has seen a remarkable period with capital investment of £8bn-plus since 2011,” says Redmond. “More developments are required to meet demand in the city. We anticipate a number of hotel and office developments to keep pace with demand.”
But it won’t be plain sailing. At EG’s Glasgow Question Time debate in January, panellists outlined challenges in delivering on the deal, given its 20-year timeframe.
“If you take £1bn and divide it by 20, it’s £50m, and if you look at major residential or commercial schemes in Glasgow that are planned, it is pretty easy to spend £50m a year,” said Savills UK investment director Bruce Patrick.
He said developers needed to engage with politicians to make sure every drop of the City Deal funding was being spent on the right thing.
Patrick said the vibrant city centre would survive and regenerate naturally, but that the outer towns, those hurt most by the recession, needed more support for regeneration.
At the same event, Clyde Gateway director of regeneration Martin McKay dubbed the City Deal a game-changer that would allow plans which had been in the pipeline to move forward. And he said the success of the northern powerhouse, south of the border, could provide a model for how to make the most of the money.
“We have to learn from what is happening with the northern powerhouse,” he said. “From a Scottish perspective, we just need to be better joined up. We need to work at making Scotland, Glasgow in particular, a better investment opportunity.”
It is impossible to talk about prospects for UK cities without mentioning politics. While Brexit was cited as a potential threat to growth by the Question Time panel, they agreed that the possibility of the UK leaving the EU was unlikely to have an impact on the Scottish real estate market.
“I have not heard anyone say ‘I am not buying that office because of Brexit’, and I don’t expect to,” said Patrick.
The only potential limiter for Glasgow, according to Locofoco brand consultant Shona Maciver, lay in the city’s psyche.
“Glasgow has to keep playing to its strengths,” she said. “Manchester is great, but Glasgow began this thing in a way that Manchester didn’t by allying itself with the arts and rising phoenix-like from its own ashes. My anxiety is not whether or not it competes with Manchester and other cities, it is that it loses its mojo and fails to understand what gave it that in the first place.”
City deal and regeneration area investment opportunities
City Centre:
£115.5m project budget
The City Deal will deliver enabling infrastructure to capitalise on opportunities for growth and investment. This will come in the form of work to improve the public realm at key city centre locations, including the resurfacing of streets and pavements; “smart” infrastructure such as surface water management systems and adaptable lighting systems; the creation of avenues of trees; segregated cycle lanes; underground facilities and reductions in vehicle traffic.
Glasgow is also investing heavily in improving infrastructure to create modern and future-proof digital solutions for the city, including 100% digital telecoms and 4G mobile capability as well as free public outdoor WiFi access throughout the city centre.
Clyde Waterfront and West End Innovation Quarter:
£113.9m project budget
This area is home to the new Queen Elizabeth University Hospital Campus, University of Glasgow and Pacific Quay. Key objectives for this project are unlocking the development potential of vacant and derelict sites for employment and housing, enhancing clustering and stimulating growth in the life sciences and higher education sectors and maximising the benefits of existing high-value industries.
Canal and North Gateway:
£83.7m project budget
The Gateway to north Glasgow, this site offers great potential to capitalise on its assets, including knowledge-based industries on the north side of the city centre, the Sighthill project (the largest of eight transformational regeneration areas in Glasgow), a growing cultural industries cluster, new leisure and recreation facilities and a number of vacant development opportunity sites.
Collegelands, Calton Barras:
£27m project budget
This area is immediately to the east of Glasgow city centre and adjacent to major economic drivers and projects such as the University of Strathclyde and Merchant City. Further east is the Clyde Gateway Regeneration Area and Commonwealth sports facilities. City Deal funding objectives for this project include the unlocking of the area’s development potential and enabling the continuation of economic activity from the city centre to the East End and progressing the existing Calton Barras Action Plan by improving infrastructure, quality of land and travel connections.
Metropolitan Glasgow Strategic Drainage Partnership:
£45.8m project budget
The Metropolitan Glasgow Strategic Drainage Partnership was formed to tackle the deficiencies in Glasgow’s drainage infrastructure identified after flooding in 2002. The City Deal business case for this proposes 14 schemes across the city.
Gallowgate
Glasgow Housing Association’s phase one new build, consisting of 62 homes for social rent on Slatefield Street, was handed over to GHA in September 2013. The total development cost was £5.86m. Work is ongoing to produce a delivery framework for the remainder of the site, which is envisaged to include private sector involvement.
Maryhill
Sixteen hectares adjacent to the Forth and Clyde Canal, estimated investment to date is circa £20m. The site is adjacent to phase two and would accommodate 136 homes. Design principles seek to create an environment able to foster social interaction and healthy lifestyles with an adaptable and resilient urban fabric based on pedestrian and cycle mobility and open spaces.
Laurieston
The £100m regeneration project in the Gorbals includes the redevelopment of 13 hectares of vacant land with delivery of up to 1,000 new homes, a new City Park, jobs and training opportunities for local people and mixed uses at street level to enliven the streetscape.
Sighthill
North of Glasgow city centre and extending to 50 hectares, activation of Sighthill TRA has been accelerated through funding accessed by Glasgow City Deal, the Scottish government and Glasgow City Council. Work at Sighthill is now 10 to 20 years ahead of schedule. Infrastructure and site development work totalling £145.9m will ensure that Sighthill is de-risked and ready for development.
Pollokshaws
Total developable area of 9.6 hectares. More than £30m has been invested in the area. The masterplan includes provision for 450 new homes plus shops and commercial opportunities.
