Edinburgh and Glasgow have been identified amongst the UK’s highest growth cities across multiple real estate sectors over the next ten years, according to new research by global real estate advisor, CBRE. The firm’s latest report ‘Which City? Which Sector? Real Estate Prospects Over The Next Decade’ found the two cities were ranked in the top five for major commercial real estate sectors – student accommodation, offices and hotels.
The report examined 12 real estate sectors across the 50 largest regional towns and cities in the UK outside of London. To inform its findings, the firm analysed economic drivers such as GDP, employment and income growth, demographic trends and property market data including supply pipeline, local universities and housing affordability to identify the top cities and sectors.
David Smith, Managing Director of CBRE Scotland, commented on the report: “Edinburgh and Glasgow have once again shown their strength as top cities for investment and growth, which is unsurprising given their strong demographic and economic fundamentals, and projected growth over the next decade. Aberdeen has also achieved notable rankings. There’s a real opportunity for investors looking at opportunities in Scotland, and we’re anticipating significant investment activity for our largest cities in the next few years.”
In the hotels sector, Edinburgh, Glasgow and Aberdeen all appear in the top five. These cities are forecast to experience the greatest rise in demand as they typically have a range of hotels at different price points.
Notably, there has been a substantial supply response to the strong performance achieved pre-pandemic with many of the hotel development projects already committed to expected to be delivered in the coming years. Glasgow and Edinburgh in particular have strong delivery pipelines with 2,142 new rooms confirmed in Glasgow and 1,888 in Edinburgh.
Kathryn Bennett, Director in CBRE Scotland’s Operational Real Estate team, commented: “It is no surprise that our largest cities have thriving hotel scenes. Last year Time Out voted Edinburgh the best city in the world and it is the number one city in the UK for travel spend and number of overnight visitors. Glasgow has become renowned for hosting large events successfully, including COP26 and the Commonwealth Games, and the OVO Hydro Arena hosts events attracting over one million people per year. Aberdeen is the gateway to the Highlands, home to famous golf courses, medieval castles and several whisky trails making it a unique place to visit.”
In the life sciences sector, Edinburgh is the fourth city in the list for highest expected growth, with Glasgow coming in sixth place.
Scotland’s life sciences ecosystem is strong and thriving, with Edinburgh and Glasgow both boasting world-class research and academic institutions. Edinburgh is widely recognised as a premier city for the life sciences industry due to its exceptional attributes. The presence of world-class research and academic institutions, such as the University of Edinburgh and its renowned Roslin Institute, underscores the city's commitment to scientific excellence. Edinburgh BioQuarter, a leading innovation hub, further bolsters the city's life science ecosystem by providing state-of-the-art infrastructure, funding opportunities and collaborative spaces for startups and established companies. It has a ten year strategic plan to transition into Edinburgh’s Health Innovation District which could generate up to 9,000 new jobs.
The existence of an incubator often serves as a promising indicator for the future success of a city as a life sciences cluster, as it typically involves a joint venture between universities, governments, and venture capital funds to accelerate the growth of spin-out companies. Whilst Glasgow has plans in place for such an establishment, well-established incubators have already taken root in Edinburgh, laying the foundation for the emergence of homegrown commercial life sciences enterprises in the future. In Glasgow, there is a 14.9% expected growth in life sciences employment.
Although Aberdeen didn’t rank in the top ten for life sciences, it is one of the potential growth areas for the city due to its large number of manufacturing, industrial and energy occupiers. It has a significant life sciences sector, and a new £40m BioHub opened recently.
Jennet Siebrits, UK Head of Research, at CBRE, added: “The way towns and cities grow and evolve is very much reflective of their local geographies, natural resources, and cultural history. As a result, no two cities in the UK are the same, and subsequently, different real estate sectors thrive in different locations. Real estate professionals need to be cognizant of these differences to help inform their strategies.”