Edinburgh invites developers to ‘do a Manchester’

By property week : 23 Oct 2009

The City of Edinburgh Council has launched an initiative to work with the property community to be a “catalyst” for economic development in the city.

The council is also in talks with banks to invest £70m to buy back property from its subsidiary companies, such as EDI, to show that it is open for business.

This week it held a breakfast briefing for Edinburgh agents to discuss its new focus on economic growth and the property development industry, and outline the 2,400 ha of “development opportunity” in the city. Similar briefings are planned with developers, investors, occupiers and property lawyers.

Convener of economic development, councillor Tom Buchanan said: “We are taking the lead to try and steer the city through the recession, while laying the foundations for its long-term prosperity.”

The council hopes to emulate cities such as Birmingham and Manchester, where public sector leadership has brought investment and development. Edinburgh is perceived to have rested on its laurels because of its world heritage site status and indigenous demand from the banks. Buchanan said this was not the case any more.

He added: “This administration has prioritised economic development and is being catalytic across a whole range of areas, including the property development market, to ensure that Edinburgh remains competitive at both national and international levels.”

The team will now take its plans to the full council — including development areas and funding — for approval in November.

It will also discuss with the council its negotiations to buy back £70m of property from struggling council-owned subsidiaries, such as EDI and Waterfront Edinburgh. It is thought the council will use Prudential borrowings — low-cost debt available to the public sector — and the rental income will service the debt, leaving profits out of the surplus.

The council’s role could range from assisting new and existing developers with utilities in new schemes to more hands-on involvement to kickstart mothballed schemes.

Peter Watton, head of physical development support at the council, said, for example, that he meets every two weeks with Henderson, which is working on the largest investment project in Edinburgh, the £1bn St James Quarter shopping centre.

“Part of our work also relates to developers who bought sites at the top of the market,” he said. “Rather than mothballing these sites, we will work to redress the balance between financial viability and the parameters of the statutory process.”

One example is the Mountgrange-owned Carltongate scheme, which is now in administration. The council owns 25% of the land for the scheme.

Categories: Economic Development

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