Glasgow has been named as the third city outside of London which has attracted the highest level of commercial property investment over the past ten years, according to global property adviser, CBRE.
As part of a new report, Core Cities, Core Strengths, CBRE shows that Glasgow secured £5.3bn of commercial property investment in the past decade, putting it only behind Manchester (£8.2bn) and Birmingham (£6.5bn). In total £44.4bn was invested across the twelve cities analysed in the report, the first of its kind to compile this level of detail. Glasgow, however, performed better than both Birmingham and Manchester on a per capita basis, though four smaller cities (Aberdeen, Edinburgh, Cardiff and Bristol) perform better in this per capita ranking than Glasgow, Manchester and Birmingham.
The report identifies the key factors behind a city’s success: civic leadership, talent in growing sectors, quality of life and ‘placemaking’, and infrastructure, provides a detailed review of the main city property markets outside London, and explores the opportunities and risks of devolution. It also includes ‘softer’ indicators such as the number of 5 star hotels or Michelin star restaurants.
In total, the regions beyond London and the South East account for almost 60% of all UK commercial real estate transactions. The findings show that investors have diversified their property holdings as part of the recent economic recovery with emerging investment sectors such as healthcare and student housing increasing their share of the market. Prior to the financial crisis, these assets accounted for 3% of investment; this has trebled to around 10% of total investment volumes today.
Overseas investment into the regions has also reached its highest level since 2007, with the first nine months of 2015 seeing twice as much investment as in the whole of 2013.
Miles Gibson, head of UK Research at CBRE, said: “The UK’s core cities face an unprecedented opportunity. Whatever the relative position of individual cities, the ongoing economic recovery provides an opportunity for them all to maximise the hand that they have been dealt and, in some cases, the legacy they have to deal with.
“Volumes of international investment into the UK are now so significant that even London is struggling to absorb it all. The UK’s core cities have a unique chance to capitalise on the world’s current desire to have exposure to Britain and its property market. It is crucial for the continued success of the UK as a whole that they take it.”
Douglas Smith, executive director from CBRE Scotland, comments: “Over the last ten years, Scotland’s three largest cities have demonstrated that they have the capability to attract investment from all over the world, so it is perhaps not surprising to see them rank highly. Each of them has a differentiated proposition but they share transport infrastructure, world renowned universities and cultural and sporting facilities which are the envy of the rest of the UK.
“As in England, devolution and localism are very topical with both UK and Scottish Governments looking to leverage wider economic and employment growth from cities and their regions.
“Large cities in Scotland face many of the same challenges as elsewhere in the UK: ensuring adequate transport infrastructure, enabling conurbation-wide coordination and governance, and investing in skills. But there are contextual differences; for example, there are no Local Enterprise Partnerships (LEPs) in Scotland which means that the proposals from the Chancellor requiring Mayors to consult businesspeople on LEPs about increases in business rates cannot be copied wholesale in Scotland. So the role of collaborations such as Scottish Cities Alliance will become increasingly important as the agenda for Scottish cities begins to move into the delivery stages.”