Scotland needs to replace or refurbish 6.1 million square feet of industrial space and a further 2.9m sq ft of office space if it wants to continue attracting inward investment, according to a report from the Scottish Property Federation (SPF).
The trade body said that such large facilities need to be put in place to make sure that none of the country’s industrial or office space is older than 30 years.
As well as attracting investors, creating the extra space will help native companies to expand. Just £4bn of investment-grade office stock is available in Scotland, the report said, compared with £13bn of retail stock, highlighting Edinburgh and Glasgow’s importance as shopping destinations and eclipsing other parts of the UK.
The SPF said that the current shortfall in space would equate to 11,500 jobs in the industrial sector and 6,500 roles in the office sector if all of the refurbished or replaced facilities were used. The report, calculated that the commercial property industry created 60,872 jobs in 2013 and contributed just under £6bn to the Scottish economy.
Scotland’s commercial property stock was worth a total of £43bn in 2013, the report said, down from a peak of £51bn in 2005. David Melhuish, director of the SPF, said: “Scotland’s commercial property industry is not only a major asset for Scotland, contributing some £6bn a year to the economy, but it also attracts inward investment. Seven out of the ten largest commercial property transactions in 2013 involved overseas investors and were worth a combined £1.8bn.
The totals for 2014 and 2015 are expected to be even higher following a rush of deals, including the blockbuster sale of Scottish Widows’ Port Hamilton head office to an unnamed overseas investor for £105m.
Melhuish added: “It is clear that attracting inward investment and funding is going to be an important part of Scotland’s economic landscape over the coming years and, although the commercial property market has already attracted significant overseas interest, we need to ensure that we have a competitive business environment to retain
and build this investment.