Brand new Highland Cinema has screen appeal DiversiďŹ cation: Spreading the risk of property assets A year of two halves Short-Term Lets’ regulation
Winter 2020/2021
Welcome to
Contents
Commercial Matters 2020 – disruption, adaptation and flexibility but don’t forget resilience.
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t’s been a fascinating year and UK property markets are not immune from change.
Following Covid lockdown in March, the real pause was actually quite brief and the adaptation of the country nothing but impressive. Online retailing provided products to our doors and the impact on the traditional high street accelerated. This boosted warehouse and logistics activity making the wider industrial sector even more popular. Foodstores came back into focus and demand in the residential sector exploded as families contemplated their home environment. We have the utmost sympathy for the leisure sector, a relaxation of lockdown in the summer showed how quickly trade can bounce back. Office utilisation will change but we’re confident the workplace and offices will remain a core part of the UK property market. But we must have a broad perspective and embrace resilience and core fundamentals of property. Looking forward we’re interested to see the impact of Brexit, which needs to be coupled with more flexible working patterns, property utilisation, a possible relaxation of the planning process and the everincreasing responsibility of Carbon emission. Change is the new norm, and property remains a resilient asset class. n
Will Sandwell 07801 266 373 will.sandwell@galbraithgroup.com
4 Diversification: Spreading the Risk 8
Deal Round-Up
10 Update: Regulation changes coming for Short-Term Lets
11 Update: ‘Planning’ a response to the pandemic 12 Update: Rates revaluation
13 Movie theatre of dreams 14 People: New graduate joins Galbraith Commercial Management Team 15 A year of two halves
Galbraith is a leading independent property consultancy. Drawing on a century of experience in land and property management the firm is progressive and dynamic employing over 200 people in offices throughout Scotland and the North of England. We provide a full range of property consulting services across the commercial, residential, rural and energy sectors. Galbraith provides a personal service, listening to clients and delivering advice to suit their particular opportunities and circumstances.
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As an investment prospect industrial property has been increasingly in vogue over recent years and that trend looks set to continue.
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t the start of lockdown towards the end of March we had to close our offices and start working from home. This caused an immediate problem in progressing property transactions. While the legal process could continue it was not possible to travel to, inspect or survey buildings where that had not already happened as part of a transaction. Eventually things eased enough to enable carefully planned and socially distanced inspections and surveys to take place, even though at the same time schools, offices, restaurants, bars, shops, coffee shops etc. were still all closed. So, at the end of May when I carried out my first inspection since the beginning of the year, this happened to be an industrial property within a large Central Belt industrial area. It immediately struck me that while things in the rest of the country were still very different, this environment looked and felt like it always has – possibly with the exception of a few businesses which remained closed. The streets were lined with cars, the flow of lorries and vans was quite heavy and there was a great deal of activity. Of course, this shouldn’t really have been a surprise given what has been well documented in relation to the rise of last mile delivery and support for essential services continuing throughout lockdown, however, having spent the previous two months in an eerily quiet city it seemed very different, in an entirely positive way.
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Resilience through adversity Jamie Thain on the enduring popularity of the industrial market Prior to lockdown the industrial market throughout the UK was very strong both on the occupier side and as an attractive investment option. The sector was already benefiting greatly from such market forces as the rise in e-commerce, which this year reached a record high in May, accounting for 32.8% of all UK retail sales. Both Edinburgh and Glasgow’s core (city and immediate surrounds) industrial markets are currently exhibiting very low supply at 3.7% and 2.8% respectively with supply in the wider Central Scotland industrial market currently at 5.9% and trending downwards. Coupled with a lack of new development and steady demand these market characteristics have led to strong rental growth over recent years. During lockdown a number of new letting transactions stalled or slowed for obvious reasons, but since the easing of restrictions has allowed more freedom of movement, many of these have now taken place. Some have achieved new rental high points, especially in the Edinburgh and Glasgow core markets. While this is positive it will inevitably result in further pressure on supply when coupled with a fairly thin pipeline of new developments underway across Central Scotland.
Coupled with a lack of new development and steady demand these market characteristics have led to strong rental growth over recent years. There has been a flurry of industrial investment transactions in Scotland since lockdown eased, which serves to underline the popularity of the sector amongst investors. Significant transactions include the sale of Amazon's Dunfermline fulfilment centre to KB Securities for around £66.8 million, representing a yield of around 4.8%. The 1 million sq ft distribution warehouse, which is let to the retailer for a further 12 years, last traded in 2017 for £54 million / 5.3%. Sainsbury’s distribution centre at Langlands Park, East Kilbride has also been sold by Orchard Street Investment Management to Blackbrook Capital Europe for £30million, which represents a yield of around 4.9%. The 274,000 sq ft regional distribution centre is let to the retailer for a further 14.5 years.
In addition, a number of multi-let estates have sold, including St Andrews Industrial Estate and Excelsior Industrial Estate in Glasgow for £5.5million / 7.34% and £5.2million / 6.30% respectively. Both were purchased by industrial specialist Stenprop and, in Edinburgh, Prestonfield Park, one of the City’s prime inner-city estates, has been sold to Ribston UK Industrial PUT for £14.45million, which represents a yield of around 4.96%. Although the sector is not immune to economic deterioration or a fall in consumer confidence, it has proved itself resilient and in some cases critical over the last few months and we expect this to continue. As an investment industrial property in all its forms, whether it be large scale logistics warehousing, last mile distribution hubs, multi-let estates or more focused trade clusters, provides an interesting option for investors going forward. In a world where many sectors are really struggling just now this is great to see. n
Jamie Thain 07798 647 620 jamie.thain@galbraithgroup.com
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DiversiďŹ cation: Spreading the Risk Will Sandwell explores diversiďŹ cation in commercial property.
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| Commercial Matters | Winter 2020/2021
‘
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on’t put all your eggs in one basket’ isn’t a technical term but it is fundamental to modern portfolio theory. For those targeting multiple assets, diversification can be achieved in many ways and there are arguments for and against the extent of its use. In an age where niche or specialist focus can pay dividends (or cause disaster), diversification can become confusing across the spectrum of property sub-sectors and different property investors’ strategies. Here we will explore where and how we see diversification within our varied client base at Galbraith. Diversification comes down to managing and spreading the risks related to property assets, and in the case of investments, the returns provided, but it shouldn’t only be regarded as a defensive strategy because it also offers opportunity – we prefer the term ‘balanced’. Sector Allocation Across the whole investment spectrum, diverse categories include cash, paper assets (stock market), real assets (property) and going concern (trading businesses). Looking at property we often see diversified exposure across residential, rural/land and commercial, all offering very
The high street is currently under well publicised pressure and we expect a structural change in this sub market... different opportunities and requiring different management skill sets. This is a tried and tested formula and different clients will prefer different weightings and it’s often a personal choice but should be reviewed against detailed modelling and performance
analysis. In the case of the professional investor, either for themselves or managing other people’s interests, diversification faces more scrutiny and should be strategic. Distilling property diversification further, in the area of commercial property there are four main sectors. The popularity of each fluctuates, this is market dynamics. Here is a summary along with the characteristics: Office The biggest sub-sector in the UK market, relatively accessible and liquid. Investments are available in a range of lot sizes (£500,000 upwards) in almost all locations. In-town and out-of-town offices provide different opportunities through building type, proximity to CBD and potential alternative use (development). Investors can gain exposure to a broad spectrum of tenant covenants and lease terms. Long-term performance is closely correlated to the wider UK economy. Already, we can see it would be easy to have multiple office assets with very different characteristics, thus achieving diversification. Retail Retail has four main sub-sectors: high street, retail warehousing, shopping centres and foodstores. The high street is currently under well-publicised pressure and we expect a structural change in this sub-market. Retail warehousing offers larger assets, actually being quite straight forward buildings often accessible with generous parking. The sector is very much linked to consumer trends and recently experienced change, being closely linked with leisure, food and beverage offerings. Shopping centres are extremely complex assets and need to have a destination draw. Multiple tenants can feed off a strong destination brand and close proximity of a diverse retailer offering. Foodstores or supermarkets remain a popular investment choice. They are easy to understand because almost all investors can relate to them. Tenant covenants often show large turnovers and consistent profits from recognised brands. The sector has recently been disrupted by the discount chains. Such properties are often let on 20 to 25-year
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leases with ination linked rent reviews, which are attractive stable cashows. While challenged at the time of writing, it would be unfair not to remind readers that prime high street retail investment consistently commanded some of the highest prices (lowest yields) for a 10 to 15-year period. Industrial The two main subcategories of the industrial sector are multi-let estates and big box logistics / distribution. Both work very differently and offer different characteristics. Distribution properties are large buildings where landlords are exposed to a single tenant. At the present time
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rental growth and tenant demand are strong and forecast to continue, this is driven by online retailing and the delivery market with little rationale for a decline in this trend. The risks for a single-let distribution investor landlord are polarised but offer exposure in a growing market. Multi-let industrial assets vary in quality but by their very nature provide a rental ow from a variety of tenants, thus diversifying the risk of tenant default and generally provide regular asset management opportunities. Specialist/Alternative This can include hotels, leisure, healthcare, residential, motor-trade and
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So diversification must be obtained to balance risk profiles in the commercial property landscape and open up new sectors to explore.
Diversification Approach
others. Specialist properties often have longer leases and fixed rental uplifts because specific market rental evidence may not be available. They offer an opportunity for an investor to have exposure away from core sectors and at the same time obtain long leases / income streams. The properties offer less flexibility or future options. Pricing and security around the investment is often driven by the tenant covenant. We would argue that while long leases are often regarded as secure income, pricing can be volatile. For example, the rise and fall in popularity of gym premises and the second instance of a CVA undertaken by Travelodge. Value can be found through early engagement in these sectors, for example, medical centres and hospitals which were priced at 6% to 7% yields have now stabilised at 4% to 5%.
It is easy to find diversification amongst the characteristics explained above including location, tenant mix, geography and lot size, which are all linked to liquidity, but investors can benefit greatly from obtaining the correct advice when looking to gain exposure to sometimes unfamiliar opportunities. Similarly, investors and their advisors must look inwards to their existing portfolios and ask questions. For example, how are lease expiries aligned? Most portfolios would seek to spread lease expiries and ultimately smooth cashflows, building a diverse portfolio which avoids multiple lease expiries and valuation fluctuations at a single point in time. Who Diversifies and How: Institutional Pension Fund Property Portfolios (seeking income and long-term growth) will diversify to obtain a lower risk profile. They build balanced exposure across sub-sectors, location and tenant exposure. This is benchmarked against all property returns of 1, 5 and 10 years. Conversely, specialist sector REITs (Real Estate Investment Trusts) have little diversity in terms of broad sector by their very nature. Therefore, they obtain diversification through geography,
tenant mix, length of income in their portfolios. This is easily obtainable and manageable but the high level exposure remains, for example a Retail REIT might not be performing as well as an Industrial REIT in the current cycle and it is difficult to drastically shift weightings / asset allocation at a downward point in the cycle of a particular sector. Property and development companies might diversify through different activities as well as sectors. For example, having a residential development exposure which offers liquidity, and also having higher risk speculative development exposure in the office sector with the aim of securing a letting to a large scale single tenant. At the same time they might hold an investment portfolio providing a diverse income stream from multiple tenants in the industrial and retail warehouse sector. Private investors and family offices are harder to provide typical examples for, but the most important consideration is that the diversification strategy meets the investment needs and risk profile, irrelevant of portfolio size or funds allocated for acquisitions. We often find diversification used to preserve capital by selecting low volatile sectors and locations but still generate sustainable flows of income. So diversification must be obtained to balance risk profiles in the commercial property landscape and open up new sectors to explore. The most important step is to take considered advice, at both portfolio and single asset level. Galbraith has a successful history of providing portfolio advice, in terms of strategy, review and reshaping; utilising our purchase and sale, agency, asset management and property management disciplines which we provide to a variety of clients from private investors to large institutions. n
Will Sandwell 07801 266 373 will.sandwell@galbraithgroup.com
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Deal Round-Up
Galabank Business & Trade Park, Galashiels The investment team were instructed to market Galabank Business and Trade Park, which comprises a modern HQ office building, a multi-let office and a trade park. The asset is let to occupiers including Kyowa Kirin International PLC, Momentum Scotland, Cube (GC) Ltd, Jewson, City Plumbing Supplies, City Electrical Factors, Rexel and Dingbro, providing an average unexpired lease term of over six years and producing a rent in the region of £887,000 p.a. The investment was acquired by M7 Real Estate for £8.60 million.
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14 Causewayside Street, Glasgow
Ladbrokes, Arbroath
87 Calder Street, Coatbridge
On behalf of a private client Galbraith was instructed to sell this industrial unit, which benefits from vacant possession and extends to approximately 11,184 sq ft within a site of 0.78 acres. The asset offered a significant reversionary opportunity with the unit requiring refurbishment prior to any further re-letting. The property was acquired by a property investor for a price of £365,000, which reflected a capital rate of £33 per sq ft.
Galbraith was instructed to sell this retail investment in Arbroath on behalf of a private investor. The asset is let to Ladbrokes for a further 8.75 years, subject to a tenant-only break option in 3.75 years, at a passing rent of £27,100 p.a.. The asset was sold to a Scottish property company for £225,000, reflecting a net initial yield of 11.79%.
On behalf of JCAM Investments, Galbraith acquired this industrial investment in Coatbridge. The industrial asset is located in Coatbridge, 10 miles east of Glasgow in close proximity to the M8. The property extends to 14,497 sq ft and is let to James Donaldson Insulation Ltd at a passing rent of £62,500 p.a. (£4.31 per sq ft). The investment was acquired for £860,000, reflecting a net initial yield of 6.90%.
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Atholl Exchange, Canning Street, Edinburgh Over the course of the past 18 months Galbraith, acting on behalf of a private client, has undertaken a significant re-letting programme at Atholl Exchange. The landlord committed to a substantial refurbishment throughout the building, which has paid dividends. The property is a prime Grade A office building arranged over five floors and extends to approximately 9,934 sq ft. Galbraith has let four of the floors in the past 18 months to a range of high quality tenants including EYCO, Westerwood, Thomson Reuters and Land Use Consultants. The prime multi-let office is now fully let and the rental tone within the building over the course of the last year has been improved from £24.00 to £28.50 per sq ft.
Fintry House, Hamilton International Business Park We were instructed to market this high yielding business park office in Hamilton International Business Park on behalf of a London-based property company. The office extends to approximately 39,637 sq ft and provides 281 car parking spaces. The asset was recently re-geared to John Lewis, providing a 10-year lease with a tenant-only break option at year five at a passing rent of £566,704 p.a. (£14.29 psf). The investment was sold for £5,000,000 which reflects a net initial yield of 10.74%.
16 Great Junction Street, Edinburgh
6 Mill Road Industrial Estate, Linlithgow
Galbraith was instructed to market this well-located retail unit on ‘To Let / For Sale’ basis on behalf of a private investor. The retail unit received a good level of interest from owner occupiers and was sold for a price of £165,000.
On behalf of a private client Galbraith was instructed to sell this industrial investment. The asset extends to approximately 6,664 sq ft and was let at a passing rent of £24,000 per annum. The asset was sold offmarket and achieved a price of £320,000, reflecting a net initial yield of 7.27%.
Kingsway Care Centre, Dundee
75 Clerk Street, Edinburgh
Acting on behalf of a Scottishbased property company, Galbraith acquired Kingsway Care Centre in Dundee. The purpose-built care home facility with 77 beds is let to NHS Tayside at a passing rent of £558,785 p.a. and was acquired for £5,200,000 exclusive, which reflects a net initial yield of 10.08%.
Galbraith was instructed to sell this retail unit on Clerk Street which benefitted from vacant possession. The property’s configuration is well suited to a number of uses including retail, a Class 2 office or hot food takeaway. The asset attracted a high level of interest from both investors and owner occupiers and was sold for a price of £197,500.
Telford Court, Clydebank, Glasgow Galbraith was instructed to sell this high-yielding multi-let industrial estate alongside joint agent Ryden. The asset is located within Clydebank Business Park, an established office and industrial park situated 6.5 miles north-west of Glasgow city centre. The property comprises 15 industrial units and extends to 32,924 sq ft. The investment produces a rent roll of £138,931 p.a. and achieved a sale price of £1.36m, which reflected a net initial yield of 9.64%.
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Update
Regulation changes coming for Short-Term Lets Jay Skinner reports on the key measures in the latest short-term lets consultation paper from Scottish Government.
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hort-term Lets (STL) have become a controversial and much debated subject in certain parts of Scotland. Their rapid growth has had a detrimental impact on housing supply and rent levels and local authorities have seen an increasing number of complaints from local residents. With continued calls for greater regulation of the use and operation of short-term lets, since April 2019 there have been several consultations, research papers and discussions around the topic, culminating in the publication of the Scottish Government’s consultation paper ‘Short-Term Lets – Consultation on a Licencing Scheme & Planning Control Areas in Scotland’ in September 2020. The Scottish Government aims to lay the regulations in December this year to allow them to come into force in Spring 2021. In light of moves towards a regulatory framework, there have also been comments made concerning recognition of the role that STLs play in supporting Scotland’s tourism industry. To arrive at this stage in the consultation process three key changes have been identified further regulation on short-term lets through licencing, taxation, and the introduction of planning control areas, more of which later.
Class 7 premises in the Use Classes Order); c) temporary – the accommodation is not the guests only or principal home; d) commercial – the let is for commercial consideration (i.e. for money or benefit in kind to the host, such as provision of a service or reciprocal use of a property); and e) excludes immediate family – none of the guests are members of the same immediate family as the host or host’s household. The definition is inclusive of both lets for work and leisure purposes and lets where the accommodation provided is a bed in a bedroom shared with other guests or a sofa bed in a living room so it does not have to be the exclusive use of a whole room. Caravans, pods and canal boats (mobile dwellings) are not defined as a short-term let. In order to introduce greater controls over the number and operation of short-term lets, one key measure proposed is the creation of ‘Control Areas’ within local authority areas.
The introduction of control areas will allow planning authorities to designate all or part(s) of their area as a control area. Within a designated area, the use of a dwellinghouse for secondary letting A short-term let is defined as a let is always deemed to involve a where all of the following criteria are material change of use and requires met: planning permission. Planning permission would still be a a) residential – the let is made to requirement regardless of the length one or more guests to reside at of time a property has been in the accommodation; operation as a short-term let prior b) accommodation – the to any control area coming into accommodation is all or part of effect. a house or flat or serviced apartment (but it is not on the Outside such areas, the current premises of a hotel or other case-by-case consideration would But first, to understand which types of properties and circumstances will be subject to the regulation, what is a short-term let?
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continue to apply at the discretion of the planning authority. Applications for planning permission in defined control areas would be determined against the relevant policies of the local development plan. Therefore, it would be up to planning authorities to determine which policies are of relevance in assessing proposals for short-term let properties. To date, the City of Edinburgh Council is one of the few local authorities to have in place a bespoke policy on short-term let properties. We believe that more local authorities will follow suit as Local Development Plans are reviewed and updated to reflect the need for a solid assessment base. It is also proposed within the Scottish Government’s consultation paper that dwellinghouses used for secondary letting can revert to residential use without planning permission. The consultation proposes that a standard planning permission for use of a property as a short-term let would be valid for ten years unless a longer or shorter period is set by the local authority. Local authorities will have the power to revoke planning permission after the period of permission and they can also set a grace period, during which time no enforcement action would be taken. The Planning team at Galbraith will be monitoring the progress of the consultation and the setting of the regulations and are available to provide expert advice with any planning-related matters. n
Jay Skinner 07557 283 177 jay.skinner@galbraithgroup.com
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‘Planning’ a response to the pandemic Jay Skinner and Jo Plant highlight the key temporary planning measures introduced in Scotland during the crisis.
T When properly conducted, early engagement with local communities and statutory consultees reaps positive rewards.
he planning system has a crucial role to play within the current Covid-19 pandemic and beyond. In this respect, a fully functioning planning system will play a key part in supporting Scotland’s future economic and societal recovery and health and wellbeing. In April this year, the Scottish Government introduced a series of temporary measures through emergency legislation to help maintain a functioning and responsive planning system during the crisis. The key temporary measures include: Pre-application public consultation for major and national development – regulations that temporarily suspend the requirement to hold a public event (given current restrictions on public gatherings and social distancing) are now in place. Prospective developers are instead required to use alternative formats (through online ‘chatrooms’ for example) to engage with the community. The Scottish Government has produced further guidance and good practice on this. When properly conducted, early engagement with local communities and statutory consultees reaps positive rewards. Experience suggests that stakeholders are more likely to ‘buy in’ and support development proposals if they are fully engaged and involved in the planning process early on.
Galbraith’s approach seeks to build trust through genuine preapplication community engagement, which is tailored to the nature and scale of development proposed. During the current pandemic, we have been involved in a number of online community consultation events. Our experience has been largely positive with members of the public acknowledging and appreciating the efforts made by developers and their project teams to continue to positively engage with communities despite the Covid-19 restrictions. Duration of planning permission – the pandemic affects the ability of both planning authorities and developers to deal with planning permissions that are due to expire imminently. For existing planning permissions that have/or will expire during the period from 6 April 2020 to 31 March 2021, the effect of the temporary legislation is that they are automatically extended to 30 September 2021. Similar provisions apply for listed building and conservation area consents. Decision-making – for the duration of the crisis, the Coronavirus (Scotland) Act 2020 gives local planning authorities the power to restrict public attendance at meetings (Committee and Local Review Body meetings, for example) on health grounds. Many local planning authorities responded proactively to this and have either introduced or expanded use of innovative technology to allow meetings to be held virtually. Some authorities are also considering amending their schemes of delegation (subject to approval from the Scottish Government) to allow a wider range of planning applications to be determined by planning officers rather than at Committee. n
Jay Skinner
Joanne Plant
07557 283 177 jay.skinner@galbraithgroup.com
07920 495 414 joanne.plant@galbraithgroup.com
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Update
Movie
Rates Revaluation Calum Innes reports on the changes to the revaluation timetable.
Calum Innes 07909 978 643 calum.innes@galbraithgroup.com
As a consequence of the coronavirus pandemic a number of statutory timetables have been derailed. The next rates revaluation was scheduled to take place on 1 April 2022, with a tone date (the hypothetical date of valuation) of 1 April 2020. As this tone date was in the middle of lockdown, and property markets were effectively frozen, it is unsurprising that the government has decided to review the timetable. The decision has been made to postpone the revaluation by 12 months, until 1 April 2023, with a tone date of 1 April 2022. The hope and expectation is that the property market will have stabilised by this point, albeit it will put pressure upon the assessor and their staff to compile the revaluation within 12 months rather than the customary 24. That said, as a consequence of the recommendations in the Barclay Review, we are
moving to a three-year revaluation cycle, with a tone date 12 months preceding the revaluation, so this change was already on the cards. In addition to alterations to the revaluation timetable, the Scottish Government has also given consideration to the statutory requirements relating to the 2017 revaluation. The existing regulations require revaluation appeals to be disposed of by the end of the third year following revaluation, i.e. 31 December 2020. As a consequence of the pandemic and the inability of valuation appeal committees to convene, or indeed ratepayers’ agents and assessors’ staff to undertake negotiations in the normal way, the Scottish Government has extended the timetable by 12 months, i.e. outstanding revaluation appeals require to be disposed of by 31 December 2021 unless they have been referred to the Lands Tribunal for Scotland. n
Planning update: The Scottish Government has recently announced its intention to extend the duration of planning permission under the provisions of the Town and Country Planning (Emergency Period and Extended Period) (Coronavirus) (Scotland) Regulations 2020. For existing planning permissions that have/or will expire during the period from 6 April 2020 to 31 March 2021, the effect is that they are automatically extended to 30 September 2021. Similar provisions apply for listed building and conservation area consents.
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Peter Scott Aiton 07917 220 781 peter.scottaiton@galbraithgroup.com
Peter Scott Aiton charts the project management of a new cinema in the Highlands.
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n a year of unprecedented change, the brand new, independent Highland Cinema bucked the trend and officially opened in Fort William. The brainchild of local entrepreneur and author Angus MacDonald, the aim was to breathe new life into the town centre with the iconic venue becoming a hub for the 20,000-strong local population, screening blockbusters and classic Scottish films as well as hosting musicians and events. Angus MacDonald’s vision for the cinema was of a traditional highland stone bothy with a red corrugated tin roof, inspired by the village hall in nearby Onich. He wanted it to be the most photographed building in Fort William. The completed venue comprises a two-screen cinema with a 109- and 62seat auditoriums, an 84-seat café and wine bar with a Douglas Fir ceiling and tables, and a terrace. The main
| Commercial Matters | Winter 2020/2021
theatre of dreams
auditorium also houses a red lotus sports car for two lucky customers. Two and a half years earlier, Galbraith’s project management team was first asked to a round table discussion to explore the options to create an iconic cinema experience in Fort William. The client, Angus MacDonald, from a local family, had bought the former cinema/ tourist information building at the top of Cameron Square on the site of the old town hall. We were appointed as project managers to guide the design procurement, involving Skye-based Dualchas Architects who had a reputation for designing the bothy vision. The red roof was seen as controversial at first but we liked it and encouraged Angus to go for it. As part of Galbraith’s instruction, our professional team advised on rates and our planning team secured detailed planning permission for the scheme. This involved building on our established working relationships with the Council’s planning officers and positive dialogue and negotiation. The existing building was on a very difficult site and there was a need to
dig further into the steep bank in order to create the desired cinema size. We advised on bringing forward the demolition of the existing building in order to clarify some of the unknown ground conditions. This removed some unknowns and assisted with delivering to a very tight programme. Meanwhile, we coordinated the design team involving Architects, Structural Engineers, Acoustic Consultants, Mechanical and Electrical Consultants, Quantity Surveyors, and Cinema Specialists. The design process and site raised numerous challenges that we navigated through with the team. Galbraith identified the need to bring on board a contractor with the ability to work on a challenging site and deliver a complex and unique building. We worked with 3b
The existing building was on a very difficult site and there was a need to dig further into the steep bank in order to create the desired cinema size. Construction to navigate everything the project threw at the team, including the difficulty of sites being closed due to Covid-19. Angus MacDonald, founder and funder of the Highland Cinema said: “I am thrilled with the building; it has received universal appeal since it opened. I owe a great deal to the professionalism that Galbraith brought to the construction process.” The vision was delivered and the cinema opened on 25 September 2020. Fort William has been blessed with an iconic building providing a fantastic venue and a hub for the local community and visitors. n 13
People
New graduate joins Galbraith Commercial Management Team Yvonne Hay has joined the Commercial Management team as a Graduate Surveyor during a particularly challenging time in which the department may well be facing its busiest period of the decade.
Yvonne Hay 07917 424 363 yvonne.hay@galbraithgroup.com
With more than 12 years’ experience as a property management accountant prior to switching to a surveyor role in 2018, Yvonne also grew up on a substantial working livestock farm in central Scotland which they redeveloped into leisure and housing. She is using this unique skillset to assist the team in ensuring they continue to perform above UK norms in rent collection performance, which has not gone unnoticed by clients who have provided positive feedback. Yvonne Hay said: “It’s not often you know what the inside of your colleagues’ homes look like before the inside of your office, but here I am making daily video calls and saying hello to their pets while discussing what COVID-19 signage to order and include in exceptional expenditure for the multi-let office blocks. “I’ve enjoyed working with the whole team remotely as we negotiate payment plans and concessions while still considering the existing programme of rent reviews, breaks and other lease events. I look forward to the learning curve required in my quest to chartership and the opportunity to meet my colleagues in person.” Yvonne will be based in the Edinburgh office when staff are able to return. n 14
A year T
he Covid-19 pandemic has undoubtedly been the leading force challenging the development land market in Scotland and we see 2020 as a year of two halves. In the early part of the year, the lockdown measures stifled the market and there was very little activity with development site sales slowing significantly. The message coming from the major housebuilders was of a cautious approach to buying sites until they had greater comfort and could see a clear path out of the situation. The lockdown created significant pentup demand which led to a very busy period in the second half of the year once restrictions were relaxed from July to September. This aligned with the development sites opening up and construction starting again, resulting in an increase of activity in the development land sector. In addition, the attitudes of developers have changed with many actively seeking to secure opportunities to fill
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of two halves their book of sites for 2021 and beyond. We’ve seen this in a recent closing date for Phase 4, South Gilmerton where we received an encouraging number of offers where headline offers were slightly ahead of where they were 12 to 18 months ago. It is difficult to predict the direction of travel for the development land market. While the rate of house sales is currently high there are uncertain times ahead with fluid lockdown measures and significant relaxation unlikely for the remainder of 2020. Across the UK, unemployment figures are on the rise and if there is a contraction in the sales rates and people are unable to afford or do not have the confidence to buy houses, this will have an impact on activity in the development land sector. The strategic land sector, however, continues to perform strongly, due to the long-term nature of the
planning process. Accordingly, it is not as susceptible to acute social and economic changes brought on by the pandemic. We are seeing that the developers are willing to take a long-term view in the expectation that by the time strategic sites under option come to fruition the world will be in a better place. We have also recently experienced developers willing to take a speculative approach by taking on challenging sites cleanly at a suitable level and then seeking to work away at the planning issues over a period of time in the anticipation that there will be a significant uplift in value. Galbraith handles a considerable number of option and promotion agreements across Scotland and the North of England and we’re currently involved in the promotion and marketing of development land, extending to more than 1,500 acres and approximately 7,000 units. n
Harry Stott provides an update on Scotland’s development land market.
Harry Stott 07909 978 644 harry.stott@galbraithgroup.com
The strategic land sector, however, continues to perform strongly, due to the long-term nature of the planning process. 15
Offices across Scotland & Northern England
Contacts Jamie Addison-Scott Investment agency
Jo Plant Planning
jamie.addison-scott@galbraithgroup.com 0131 240 2287 | 07824 435 094
joanne.plant@galbraithgroup.com 0131 240 3030 | 07920 495 414
Martin Cassels Building Surveying
John Pullen Building Surveying
martin.cassels@galbraithgroup.com 0131 240 6992 | 07887 484 057
john.pullen@galbraithgroup.com 01463 245 372 | 07557 163 140
Ben Dobson Agency (office, retail, industrial) ben.dobson@galbraithgroup.com 0131 240 2288 | 07584 336 085 Pamela Gray Asset management, professional & valuation, property management pamela.gray@galbraithgroup.com 0131 240 6963 | 07766 508 960 Richard Higgins Agency (investment, office, retail, industrial) asset management, professional & valuation
Will Sandwell Investment agency will.sandwell@galbraithgroup.com 0131 240 6997 | 07801 266 373 Peter Scott Aiton Building Surveying peter.scottaiton@galbraithgroup.com 0131 240 6967 | 07917 220 781 Jay Skinner Planning
richard.higgins@galbraithgroup.com 01786 434 625 | 07717 581 741
jay.skinner@galbraithgroup.com 0131 240 6978 | 07557 283 177
Calum Innes Agency (development & commercial), planning, project coordination, professional & valuation
Harry Stott Agency (development & commercial), planning, professional & valuation
calum.innes@galbraithgroup.com 01738 456 075 | 07909 978 643
harry.stott@galbraithgroup.com 01786 434 630 | 07909 978 644
Alison McLean Property management, asset management, professional & valuation
James Taylor Building Surveying
alison.maclean@galbraithgroup.com 0131 240 6981 | 07920 495 413
james.taylor@galbraithgroup.com 01786 434 610 | 07766 250 796
Pam Over Asset management, project development & coordination, property management
Jamie Thain Investment agency
pam.over@galbraithgroup.com 0131 240 6965 | 07867 977 631
jamie.thain@galbraithgroup.com 0131 240 6994 | 07798 647 620
Expertise Galbraith operates from 13 offices across Scotland and Northern England bringing our clients a wealth of experience in: • Residential estate agency • Property lettings • Commercial property sales & management • Estate, farm & forestry sales & acquisitions • Estates, farming & land management • Renewables and utilities • Building surveying • Commercial forestry & woodland management