If anyone can help solve the country’s housing crisis it is Graeme Bone, founder of Drum Property Group. He shares his vision – and his frustrations – in shaping Scotland’s masterplan.
Graeme Bone chooses his words carefully. Not for him are bold statements that might be misconstrued in the global maelstrom of social media dysfunction. As a former Aberdeenshire lawyer, he is not prone to speaking off the cuff or simply floating an ill-considered thought.
So when he speaks on the record about Scotland’s housing crisis, the Housing (Scotland) Bill, and the levels of national infrastructure and funding that are properly needed, anyone involved in solving our national housing issues needs to sit up and take note.
Bone, winner of the Business Leadership Award in this year’s Scottish Property Awards, is the founder and managing director of Drum Property Group, now one of Scotland’s biggest development firms, with a slate of investments and development projects with a completion value at more than £3bn.
The company’s story began in Aberdeen but the company is now well established in the central belt of Scotland, particularly in Glasgow after the award-winning £500m rejuvenation of Buchanan Wharf on the Clyde, and at Candleriggs Square in the Merchant City.
Drum has built Scotland’s largest 500-bedroom hotel, and 346 modern apartments, which is the first phase of the regeneration of the contentious Candleriggs gap site.
The company is also one of Scotland’s largest private residential landlords and, in 2015, it floated its real estate investment trust, called Drum Income Plus REIT, on the London Stock Exchange.
All positive stuff. More ominously for Scotland, Drum is now shifting its focus to Leeds and Manchester where its financial muscle carries much more weight, and regulations and policy making are more supportive of schemes worth £250m. More of this, anon.
“Graeme is a very patient and considered guy. He was able to pull together all the diverse pieces of land ownership on Glasgow’s central Clydeside, working closely with the City of Glasgow Council, which ultimately brought Barclays’ world-class campus to Glasgow. This was a massive achievement and one of Scotland’s largest inward investments,” said one industry insider who knows how Bone works.
“He has used the same collaborative approach to turning a long-running festering project that was going nowhere on land beside Edinburgh airport and driving a private and public partnership that will transform the area around the western side of the capital.”
The Business meets Graeme Bone and his colleague Fife Hyland, Drum’s operations director, on the top floor of their Melville Street office in Edinburgh, to talk about West Town.
For readers in the West of Scotland, to clear any doubt, West Town will be in the East of Scotland. It will become a so-called 20-minute neighbourhood of the mid-21st century, exceeding standards for environmental sustainability and low-carbon living.
Bone is an affable guy with gentle humour but is deadly serious when it comes to reshaping swathes of Scotland and making them fit for the next 100 years or so.
“What we are doing in West Edinburgh sits contextually as to where we are as a country and what we, as Drum, are trying to do,” he says.
We use a number of litmus tests in how we are creating the masterplan and one of the criteria is how safe will it be for a seven-year-old to cycle to school.
“If you look at Edinburgh generally and its significance as the capital city and what it is trying to do, and where it is trying to grow, West Edinburgh is the most obvious place for the city to expand,” he says.
Indeed. This was identified more than 30 years ago, when the farmlands across from Gogarburn and adjacent to the airport were bought by a group of business figures including Jimmy Gammell, then the doyen of Edinburgh fund management firm Ivory & Sime.
In the intervening decades, and with wrangles about building on green belt, it has taken national and local government years to allocate this space for residential and mixed-use development.
“At that time, the conventional thinking of planners was that we would continue to grow our cities on a zonal basis: you live in one place, and travel to work or school in another, and you would do your shopping or leisure activities in another zone. For a variety of reasons that didn’t come to fruition for West Edinburgh,” says Bone.
There was a stasis in Edinburgh; to resolve it required a change in Scotland’s national masterplan.
“When we were invited to invest in that project three years ago it seemed obvious that the way national planning policy and society in general was moving – and what cities like Edinburgh really needed and wanted – meant there was an opportunity to reposition the project completely.”
West Town will become a residential neighbourhood attached to the city. Edinburgh City Council is expected to consider the proposals in the coming months, and if they get the go-ahead, the first ground will be cut later in 2025.
“It’s a really fascinating project and something that is taking up a significant amount of our time at the moment.
“We are aiming for an exemplar 20-minute neighbourhood using the existing key infrastructure of the Edinburgh tramline. It’s 7,000 new homes and new schools, and commercial premises.
“It is demonstrably one of the largest, most ambitious urban expansion projects in Europe. What is most interesting is how this sits with the Edinburgh and the Scotland story.
“We believe as a country we desperately need growth, and the Scottish Government has declared a housing emergency.
“We believe there is something fundamentally and structurally wrong when a teacher, a nurse or a police officer, struggles to get a new home.
“The availability of honest, good quality, mid-market, affordable housing is really a key component for any city’s story. We tend to view housing in that context as national infrastructure,” says Bone.
“What we want to do at West Town is deliver much more than our minimum obligations for that type of mid-market and key worker housing.
“What we are actually doing is responding absolutely and directly on point with emerging policy thinking around how large-scale urban expansion should be master-planned and what its aspirations should be from a sustainability standpoint.”
So West Town will become a magnet for people and families wishing to live and work in Scotland’s capital city.
“We use a number of litmus tests in how we are creating the masterplan and one of the criteria is how safe will it be for a seven-year-old to cycle to school.”
The more ominous note mentioned above – and it is one which perplexes Bone and his Drum colleagues – involves the Housing (Scotland) Bill, dubbed in some quarters as an “unmitigated disaster” with serious repercussions for development in Scotland.
More Homes More Quickly, an organisation formed to respond to the bill, has estimated that more than £3bn of investment has been diverted away from Scotland since the inception of the Housing Bill.
Currently, a Scottish Government Housing Investment Taskforce, chaired by Paul McLennan MSP, is considering the issues of affordable housing and it is expected to give its recommendation in March 2025.
“For us, the jury’s out on the Scottish Government’s approach to housing supply,” says Bone. “Generally, but particularly in af fordable, mid-market housing.
“If you are going to have subsidised housing in any great degree or in numbers, you can only do it in one of three ways: as after the mid-seventies when the UK Government stepped out of large-scale housing provision, you build stuff from tax receipts or the government borrows money, the third way is you embrace a large-scale public-private sector approach to housing delivery.”
Large-scale housing remains highly capital intensive and a fundamental part of the nation’s infrastructure. Bone is clear about what must happen to smooth the progression to delivering homes in the UK.
“Domestic policy for any government is meaningless unless the capital markets embrace that domestic policy. Because the mobility of global capital is such that if they don’t like the way it is shaping up, then that capital moves elsewhere.
“The jury is out for us at the moment about where the Scottish Government are going with that,” Bone adds.
This should raise alarm bells. Labour’s Deputy Prime Minister, Angela Rayner, has told officials to fast-track permission for 300,000 new homes on 200 sites across England and Wales.
Meantime, Drum is ahead of the game and has turned to the larger urban areas of Manchester and Leeds, which can only be to the detriment of development plans in Scotland.
“We are the most experienced institutional build-to-rent housing developers in Scotland, and we are at the point of investing £250m in schemes in Leeds and Manchester to deliver 1,000 new homes. That’s investment, which to be frank, is being diverted away from Scotland.”
Bone does not want to cause alarm or offence with his observations; he purely wants those who are calling for more affordable homes in Scotland to understand the financial nuances of large-scale development.
“If the policy environment was correct, I’ve no doubt that money would have been invested in Scotland. There is a naivety in government about this. It’s nice to be principled around the direction of policy. But if your policy doesn’t find favour with capital markets, unless you’re prepared to pay for it yourself, it’s not going to happen.”
One industry insider who knows Drum’s modus operandi says Bone’s experienced team approaches issues with a nimble business mindset, listening to arguments, assessing sticking points, and then trying to navigate through any quagmire. This has become Drum’s forte.
“Looking at the housing issues more positively, we believe that the opportunity exists for the public and private sector to work together collectively to create a better built environment for Scotland and to see our country grow and prosper,” says Bone.
Let’s hope that Drum does not feel it had to turn its back on Scotland’s future.