EDINBURGH could be a “European stronghold” in the mould of Frankfurt or Brussels, but only if commercial property developers keep pace with a rapidly changing city.
A new report from property consultant Tuffin Ferraby Taylor (TFT), entitled The Role of Property in Delivery Edinburgh’s Economic Potential, says Edinburgh can flourish by exploiting its position as a centre for the growing technology and life sciences industries, alongside its four universities and favourable demographic profile.
“Why can’t Edinburgh be like Frankfurt or Brussels? It’s got the intelligent, young workforce, it’s got the real estate and infrastructure hopefully to back it up,” said Neil Wotherspoon, partner at TFT. “That’s where they should be aiming. The city has the potential to be a European stronghold.”
Mr Wotherspoon said that the role of property developers in achieving this was critical. “They’ve got to up their game a little bit, provide a higher end product,” he said. “It’s a bit like the world of Silicon Valley to a lesser extent, but the people coming into these environments are going to want a really good quality place to work.”
He highlighted developments at Quartermile – home to Skyscanner – and Haymarket as being in line with what the city’s businesses will demand.
Report author Sue Foxley said what became clear from the research was that Edinburgh needed affordable space in an accessible location, which she compared to the rise of in London as a home of “innovative business and economic activity”.
Mr Wotherspoon warned that a “perfect storm” was being created as demand for office space significantly outstrips supply.
The report says: “Unfortunately, the city is suffering from a shortage of office stock, with speculative schemes ready to meet demand from growing and incoming businesses particularly limited.”
The challenge for developers is to not only find space, but to develop in line with the requirements of these new industries.
Ms Foxley said developers had to look at “who is going to be occupying the space and how they are going to be occupying it”.
As a result of the “lost decade” following the financial crash, Edinburgh’s ability to adapt has made it an attractive destination for inward and overseas investments – with 41 Foreign Direct Investments (FDI) in the city in 2015.
The report highlights how the city’s business community and employment base illustrate the diversity in the city – and how it is connected with other cities, whether London or overseas.
Migration, it says, combined with the concentration of universities, has contributed to the city's youthful workforce profile, noting: “This is facilitating and driving changing in the city’s work dynamic”.
The report steers clear of commenting on the impact of Brexit or a potential second independence referendum, but does say that while there is “clearly uncertainty on how EU migration, which is so important to Edinburgh, will operate in the future, there appears to be no political appetite to deter the skilled and talented”.
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