NEW research from Lismore Real Estate Advisors has shown that 89% of investors expect to see investment opportunities in Glasgow city centre market increase over the next year.
Property companies are described as the most ‘bullish’, with over 90% forecasting a year of opportunity, while funds are more cautious at 40%.
Lismore said investor feedback underscores Glasgow’s attractiveness due to its favourable yield gap compared to other key regional cities and ‘robust fundamentals’ across various sectors, including an under supply of PBSA, a strong prime retail market and in the office sector, a low availability of Grade A space.
Living and Industrial sectors are favoured by investors, accounting for 32% each. The retail and office sectors also garner interest by 18% of respondents.
Lismore interviewed Stuart Orr, senior development manager of Land Securities, who said, “Glasgow’s allure for redevelopment and investment lies in its robust infrastructure and economic prowess, boasting a substantial, well-educated population and thriving sectors like office and retail, with Buchanan Street having effectively zero vacancy and 20% rental growth over the last 18 months.
“Challenges persist, with construction costs and financing hurdles hindering redevelopment projects in recent years. Despite setbacks, Glasgow’s resilience shines through, with strategies focusing on sustainable mixed-use and PBSA developments. Glasgow’s potential remains recognised, even amidst day-to-day urban issues, including a better integrated public transport infrastructure that connects to the airport and improvements to public realm.
“As regeneration efforts continue, areas like Tradeston, Lancefield Quay and Cowcaddens emerge as hot spots for revitalisation, driven by favourable land values and proximity to transport hubs, promising a vibrant future for the city’s urban landscape.”
Simon Cusiter, director of Lismore, commented, “Glasgow City Council’s aspirations to rejuvenate the heart of the city and draw residents back to its centre reflect a broader trend in the UK property market. Glasgow’s city centre population growth hinges on rent control policy, but uncertainty due to the Housing Bill, delays investment and has stalled development for several years.
“Short-term impacts hinder growth, but the medium-term potential is significant. It is more crucial than ever that public and private sectors are properly aligned in order to stimulate the development and regeneration the city deserves. Glasgow’s resilience shines through, but the key to unlocking this potential is in supporting regeneration in the city centre collaboratively between public and private sector to provide housing and office space to allow the city to thrive.”
