The quest to transform urban centres means replacing derelict department stores and mobile phone and betting shops with vibrant mixed-use neighbourhoods.
So, the dust has begun to settle. Somewhat. And while it has not quite been Armageddon, the serial crises of the Covid pandemic, the first European war in almost eight decades and a dramatic increase in the cost of living have all had a profound impact on our often-dilapidated city centres – which were, in many cases, long due for transformation.
This has been highlighted on several levels. In July, a draft report produced by the Moffat Centre, the UK’s largest university-based research centre for tourism, travel and business development, based at Glasgow Caledonian University, highlighted the need for proactive and bold initiatives to help revitalise Glasgow’s city centre.
Produced for the City Centre Task Force, and backed by the Glasgow Chamber of Commerce, it reported declines in key indicators between 2014 and 2023 which included GDP falling by 15.1 per cent, employment by 10 per cent, output by 12.9 per cent and gross value added (GVA) by 17 per cent.
There have of course been several well-publicised schemes to counter accusations of a down-at-heel and less-than-welcoming city centre, headlined by the ‘Golden Z’ zone, including an £825m plan announced in 2022 by a team led by Foster + Partners for Buchanan Galleries to be redeveloped by site owner Landsec as a multi-purpose shopping, residential and office quarter.
Coming less than less than a quarter of a century after the landmark centre was built it represents an appetite for mixed use also highlighted by the Chris Stewart Group’s £100m Love Loan development in the city which aims to bring together hotel and residential, health and wellbeing and food and drink “with a focus on community and sustainability”.
In Edinburgh, the urban quarter by Parabola at Edinburgh Park is attracting significant clients and has been designed to create a “socially inclusive, healthy and culturally vibrant environment in one of the best connected mixed-used neighbourhoods in Scotland’s capital”.
There’s a need to boost the living agenda and that is where build-to-rent will be important.
– David Melhuish
These are all part of a pattern that demonstrates the speed at which investors and developers are reacting to keep pace with the evolving demands of tenants and clients who are demonstrably not returning to five-day working weeks in city centre offices.
Environmental, social and governance (ESG) and sustainability imperatives have also raised the profile of mixed use, pushing ‘wellbeing’ and ‘placemaking’ up the everyday agenda [see page 16] while the decline in traditional retail and the need for innovative, experiential space continue to be the subjects of discussion among property professionals.
David Melhuish, director of the Scottish Property Federation (SPF), says the Moffat Centre report is interesting because it reaches back to 2014 and suggests the decline in city centres predates Covid, demonstrating a wider need to undergo a rethink, especially about retail.
“If you look at Edinburgh and especially the St James Quarter you see what’s possible with the advent of the experience economy,” he says.
“People there can find some top-line brands they won’t necessarily see on the typical high street but there’s also leisure – and essentially the focus is on the customer experience.
“That means attracting people into city centres and spending additional time there which will add to the economy by offering them something they won’t get by surfing online.”
Retail, though, faces its particular challenges as it awaits a worrying Budget and higher energy bills. According to the British Retail Consortium retail sales monitor, total retail sales rose 1 per cent over the year to August, up from July’s 0.5 per cent increase, but they were down on the 4.1 per cent growth in the same period last year.
In terms of the changing face of the office market in the capital, Melhuish points to BAM Properties’ and Hermes Investment Management’s Capital Square development in the city’s Exchange District attracting tenants such as law firms Pinsent Masons and Brodies, which describes its home there as “delivering environmental standards that enhance the health and wellbeing of everyone who visits and works”.
It is part of a consensus that an impressive glass exterior and a space for employees to park their bikes are no longer enough to attract people back to work in city centres and that blue-chip, corporate occupiers have become increasingly demanding with “much more focus on the issues of mindfulness and wellbeing”.
There are notable positive examples in Glasgow, such as HFD’s impressive 177 Bothwell Street, which demonstrates the office is still central to the creation and maintenance of a corporate culture that fosters the innovation and creativity required to remain competitive.
Melhuish thinks, though, that like other locations in Scotland the city is lagging somewhat in these stakes. “The issue is that if you don’t have footfall coming into the city on a regular day-to-day basis throughout the year, that has implications for cafes, restaurants and other amenities.”
He adds that Glasgow City
Council is trying to invest in the city centre landscape to dispel the image of derelict department stores and mobile phone and betting shops in some central areas such as Argyle Street.
Though the Avenues, the £5.7m revamp of Glasgow’s Sauchiehall Street that began last year has attracted some criticism, the Golden Z initiative, Melhuish says, represents a serious attempt to revitalise some major buildings.
“There’s also a need to boost the living agenda and that is where build-to-rent will be important because that’s where the kind of large-scale urban centre investments including PBSA (purpose built student accommodation) such as you see in Manchester represent successful transformation – and what both the council and private investors are trying to bring about.”
That student population is increasingly important, not just in our two biggest cities but beyond.
In many cases, urban regeneration boils down to the presence of universities.
– Craig Watson
“In many cases, urban regeneration boils down to the presence of universities,” says Craig Watson, who is JLL’s director, national office agency, based in Edinburgh.
“Where there’s a university, there’s always a natural link to the office market and Stirling and Dundee have a much broader base of occupiers than other cities.”
Dundee, he adds, has been especially energetic and has very much made a name through companies such as Rockstar being born there and spilling out of the city to become big success stories.
Resembling the much-praised Social Hub, a mixed-use development in Glasgow’s Candleriggs Square [See Graeme Bone interview, page 10], Caledonian House in Dundee is a purpose-built building of 60,000sq ft (of which JLL is a joint letting agent) arranged over three inter-connecting blocks with floorplates from around 5,000sq ft upwards and easily subdivisible.
“Some of the building is let to traditional office users and the client has chosen to go down the route of also developing student accommodation so you have a scenario which will see the building available for students and half as office product available for the leasing market,” he says.
He also points out that some of the newest office buildings in Scotland are in Dundee and Stirling with the former about to complete the newest office building in the country, a pre-let, off-plan development for BT.
“If the rent profile is right and if the lease length is long enough, investors will be interested. There is investor appetite for cities like Dundee, where there’s the right asset leads to the right occupier, on the right lease terms,” says Watson.
So, while significant challenges lie ahead for Scottish urban regeneration and these problems will be best tackled through collaboration within the industry as well as between the private and public sectors, it seems that – like the famous headline regarding Mark Twain’s demise – reports of the death of the city centre have so far been somewhat exaggerated.
