Scotland


Optimism Reigns Reports Richard Rennie Burness Paull LLP


There’s a renewed feeling of optimism in the Scottish property market following a couple of challenging years.


The instability created by an environment characterised by inflation and rapidly rising interest rates dampened investor appetite, which meant that there were fewer transactions and less funding available – while the deals that were happening were protracted by nervousness and extra due diligence.


With inflation having stabilised and interest rates now beginning to come down, there is now increased certainty and greater investor confidence. This is reflected in what we at Burness Paull are seeing, with clients who had been biding their time returning to the market and deal times falling again.


While there are of course sectoral and geographical nuances, the fundamentals of the Scottish market are strong. Banks and other lenders are following the sentiment, and we are seeing some new money deals rather than just extensions of existing facilities.


Purpose-built student accommodation (PBSA) remains a growth area, and the leisure market is experiencing a rejuvenation with strong performances from hotels and restaurants, driven by the easing of cost- of-living pressures for consumers.


This is particularly the case in Edinburgh, which was ranked as the top location for hotel investment in the 2024 Colliers International UK Hotel Market Index.


Edinburgh has long been a leading tourist destination and demand for visitor accommodation remains strong, but the availability of short-term


lets has been limited by recently introduced regulation and licensing rules – and hotels are reaping the benefit.


The demand for new hotel development is contributing to Edinburgh’s lack of supply for new-build and energy efficient grade A office space – with many existing offices being acquired for redevelopment as hotels.


Just a couple of years ago, debates were raging about to what extent workers would return to the office following the Covid pandemic. While there is undoubtedly more flexibility than before, most organisations seem to recognise the benefits that having their staff in the office for at least part of the week has from a team cohesion and wellbeing perspective.


Many have adapted their office spaces and this, combined with a desire to reduce energy consumption and achieve sustainability targets, has meant there is increased demand for office space with high BREEAM/NABERS ratings. The inevitable result of that increased demand and lack of supply is a real upward pressure on rents for the best space. This ought to fuel further development to increase supply.


Challenges undoubtedly remain, not least around the glacial pace of the planning system, and the impact of higher costs which has impacted the retail sector in particular.


However, on a broad level, there is good reason to be cautiously optimistic about Scotland’s commercial property sector, which has a key role to play in supporting the wider economy.


Richard Rennie is a partner in the real estate team at Burness Paull LLP Richard.Rennie@burnesspaull.com


Queensferry One: A Modern Hub of Industrial Innovation and Green Growth


Queensferry One, located on the northern bank of the Firth of Forth in Rosyth, has transformed from a historic naval base into one of Scotland’s largest industrial and logistics developments. Integral to the Forth Green Freeport, it exemplifies Scotland’s push towards a net-zero future.


Historical Significance and Transformation Established in the early 1900s, Queensferry One was a key naval dockyard supporting Royal Navy operations during both World Wars. Its expansive dry docks and towering cranes were pivotal in shipbuilding and repair. As naval activities declined, the site transitioned to meet the industrial economy’s evolving needs.


In the late 1990s, Scarborough Muir Group (SMG), a joint venture between Scarborough Group International and Muir Group, acquired the site. Planning permission for enabling works was granted in 2003, leading to extensive land remediation. A significant project involved demolishing a bomb-proof bunker used for naval fuel storage, repurposing it as hardcore for infrastructure projects across Fife. By early 2023, the site was prepared for new development.


Forth Green Freeport Status


In June 2024, Queensferry One secured Special Tax Site status under the Forth Green Freeport initiative, one of nine such Tax Sites across Scotland. Businesses investing in these locations benefit from tax incentives that offset initial investment costs and reduce operating expenses. These include Enhanced Capital Allowances, offering 100% tax allowances on plant or machinery, and Enhanced Structures and Buildings Allowance, providing 10% tax allowances on constructing or renovating non-residential buildings. Additional incentives include Employer National Insurance contributions relief, Land and Buildings Transaction Tax relief, and Non-Domestic Rates


12 Relief, making the Freeport an attractive investment destination.


Development and Opportunities Spanning over 120 acres, Queensferry One aims to deliver more than 1.2 million sq ft of high-quality industrial and logistics space. The site offers flexible accommodation options, including pre-let and design- and-build opportunities ranging from 50,000 to 500,000 sq ft, as well as fully serviced plots available on a freehold or long leasehold basis.


Its strategic location near deep water access points, excellent transport links, and proximity to Edinburgh Airport and major road and rail networks further enhance its appeal. This connectivity supports efficient logistics and supply chain operations, making it an ideal base for companies in the renewables and advanced manufacturing sectors.


Future Vision Queensferry One’s inclusion in the Forth Green Freeport initiative is a boon for businesses and a catalyst for local community growth. The expected influx of investment and development is projected to create significant employment opportunities, invigorating the local economy and stimulating long-term prosperity.


As Queensferry One evolves, it stands as a testament to adaptation and growth. From its roots as a naval dockyard to its future as a linchpin in Scotland’s green industrial revolution, Queensferry One is poised to play a pivotal role in the country’s journey towards a sustainable and prosperous future.


For more information, visit www.queensferryone.co.uk.


COMMERCIAL PROPERTY MONTHLY 2024


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60