Business

Scots property chief urges investment in offices to revive stricken cities

POLITICIANS should prioritise investment in offices to drive the recovery of city centres from the pandemic and create jobs for the future, a senior figure from the Scottish commercial property sector has declared.

David Davidson, chairman of Cushman & Wakefield in Scotland, underlined the importance of a vibrant office sector to the prosperity of town and city centre economies as footfall remains stubbornly low, despite Covid restrictions easing.

A survey of 155 office buildings in the UK, covering 200,000 potential workers, put office occupancy in Glasgow at just 8.1 per cent for the week ending February 4. This compared with 16.5% in Edinburgh, 17.6% in Manchester, 21.5% in London, 30.6% in Birmingham, and 44% in Leeds. The study, from Remit Consulting, was followed by figures published by the Scottish Retail Consortium yesterday, which revealed that retail footfall dropped in Scotland in February. Outside London, Scotland was found to have been the worst-performing part of the UK.

Mr Davidson told The Herald there is a “one, two, three year journey ahead of us” in terms of town and city centre recovery, observing that employers face a challenge in convincing staff to return to places of work.

But Mr Davidson is in no doubt that the economic prosperity of city centres such as Glasgow rests on thriving office life. “The last two years have demonstrated how important it is to have office workers in the city centre – they are economic drivers,” he said. “Politically… we need to elevate the importance of office jobs to cities. They (cities) are all highly dependent on office jobs and retail.”

Asked if the office sector has been making its voice heard on the issue, he added: “The office sector has been vocal, but a lot of focus has been on leisure.”

Mr Davidson, who noted that the absence of office workers over the last two years has “made the city centre less safe”, said the development of Glasgow’s International Financial Services District in recent years shows what can be achieved with public sector backing of office development. He said the IFSD “would not have happened” without the intervention of government, both in terms of improving the streetscape and in attracting investment.

Now, following the devastation caused by the pandemic, he said there is a need for investment of this scale again. His comments come amid growing recognition at private sector and local government level that a new approach is needed to safeguard the future of city centres, as stakeholders acknowledge that retail alone cannot sustain their economies.

Mr Davidson said employers are currently facing a “dilemma” as they assess how much office space they need as they plan for the future, given the extent to which home working has become entrenched. Some companies are using breaks in lease deals to move to new premises, often to smaller but higher-quality spaces. This trend is driven both by the shift to ‘hybrid’ working, and demands for premises that are more sustainable and conducive to employee well-being.

Mr Davidson highlighted the attraction of the environmental, social and governance (ESG) credentials offered by developments such as the huge 177 Bothwell Street block under development in Glasgow, where future tenants will include Virgin Money, owner of Clydesdale Bank. The energy for the building, which will offer more than 300 cycle spaces and electric vehicle charging points, will be supplied by Blantyre Muir Wind Farm in South Lanarkshire.

Meanwhile, from a property investment perspective, Mr Davidson said there are signs of increasing activity. This has been helped by the easing of international travel restrictions, which means investors are now freer to travel to the UK to visit sites.

Mr Davidson said there is “very little activity from Russian investors” in Scotland. “However we cannot be immune from the wide-ranging impacts of a war so close to our country and the position is changing rapidly,” he added.

Previous ArticleNext Article

Leave a Reply

Your email address will not be published.