Scotland's Economy

Scotland: an attractive place to invest

March 14, 2019 by Derek Mackay MSP No Comments | Category Economy, Investment, Uncategorized

With investment in Scottish commercial property topping £2.3 billion, 37% ahead of the 10-year annual average, the sector in Scotland is buoyant. Couple that with Scotland being named one of the most beautiful countries in the world – according to Rock Guide – and its little wonder businesses are keen to locate here.

In fact, did you know that Scotland is the UK’s top destination for Foreign Direct Investment (FDI) outside London? Or that Glasgow is the 4th largest city in the UK, with a metropolitan population of nearly 2 million and a return on investment, yields and vacancy rates similar to Manchester? Or how about that Scotland is home to four of the world’s top 200 universities?

Everywhere you look, Scotland has strength in numbers: Edinburgh has the highest concentration of financial and business services companies outside London, and is a growing global digital and fintech hub, a quarter of Scotland’s top 100 companies are based in Aberdeen, and Dundee have of course just opened their £80m V&A Museum of Design. On top of all this, Scotland produces 59% of its electricity usage from renewables, and is on target to reach 100% by 2020.

The opportunities are vast, and that is why Scotland’s public and private sectors came together at MIPIM 2019 to show these opportunities off to the industry. The 3-day programme of talks and presentations highlighted why Scotland is a fantastic place to invest with topics spanning industrial, innovation, waterfront and build-to-rent opportunities across our major cities.

And we are every bit as proud of this modern, thriving, innovative Scotland that we have built as we are of our heritage.

The art of building a nation requires many talents, and the built environment is an integral part, setting the tone and quality for how people and communities interact.

Scotland has laid the foundations to support an increase in construction and development for years to come. We are committed to building more houses, including 50,000 affordable units by 2021, but private development is equally critical to that. Our Rental Income Guarantee Scheme de-risks new developments by compensating developers if there is a shortfall against expected income – ensuring that new developments can proceed with confidence.

Recent reforms to our Land and Business Transaction Tax also mean that Build to Rent (BTR) landlords are exempt for purchases of more than six units; for developers, there is no tax to pay until a new unit is occupied and new tenants get a year’s relief from rates.

We are innovating our financial support as well. Our Growth Accelerator Model allows local authorities to support infrastructure development for complex sites by raising money against future value. The Business Growth Accelerator means no increase in bills from improvements made to existing developments for 12 months.

Next year, we will launch the Scottish National Investment Bank, providing a single point of access for investment finance to support new building as well as innovative technology. The Scottish Government has already committed to capitalising the bank at £2 billion over the next decade.

And of course, we continue to invest in transport links. Over £850 million will be invested in upgrading the railway infrastructure between our two main cities, Edinburgh and Glasgow, reducing the travel time for half of Scotland’s population to just 45 minutes. Motorways and roads have had an upgrade too, opening new industrial and commuting areas between them.

If built environment is important, our business activities within it are equally so. The world is changing, and business is increasingly driven by values. The progressive spirit at the centre of Scotland’s vision for inclusive economic growth is synonymous with being open for business.

Greater equity goes hand in hand with greater economic stability and more sustainable growth, as well as higher talent retention and productivity. We know that economies can grow when businesses locate here, invest here and create new jobs here. And we support businesses that want to be a part of that.

These values are the ones which make Scotland an attractive place to live. They are what drive us to train and educate one of the most highly-skilled workforces in the world, and to support innovation. This helps investment in connecting cities and communities, both physically and virtually.

We are using the connections between people and places to create entrepreneurial hotbeds for AI, digital services, personalised medicine, renewable energy and advanced manufacturing – our values are what makes Scotland a nation on the move.

And a nation on the move needs a property sector on the move, too. These people, businesses and sectors need somewhere to live, to work and to play. I am proud too that we have listened to industry and put in place a due diligence process that proves we have checked that investments stack up.

Scotland is ready for the world and ready for the market. Scotland is Now.

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