Investment
READY
V&A, Dundee
DalwhinnieDistillery–TheHighlands
InternationalFinancialServicesDistrict-Glasgow
OilRigs–NorthSea LifeSciences–EdinburghBioQuarter
DalwhinnieDistillery–TheHighlands
InternationalFinancialServicesDistrict-Glasgow
OilRigs–NorthSea LifeSciences–EdinburghBioQuarter
DalwhinnieDistillery–TheHighlands
InternationalFinancialServicesDistrict-Glasgow
OilRigs–NorthSea LifeSciences–EdinburghBioQuarter
DalwhinnieDistillery–TheHighlands
InternationalFinancialServicesDistrict-Glasgow
OilRigs–NorthSea LifeSciences–EdinburghBioQuarter
Dalwhinnie Distillery – The Highlands
North Sea oil rigs
International Financial Services District- Glasgow
Life Sciences – Edinburgh Bio Quarter
Investing in Scotland
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CO
NTENTS
Economic strengths
Innovation and skilled workforce
Scottish cities
Supporting capital investment
Scottish Business Rates
Build to Rent (BTR) and the Rental Income Guarantee Scheme (RIGS)
Expansion of aordable, mid-market rent housing through innovative funding schemes
Financial Innovation
Reforming Scotland’s planning system
Engagement with Scotland’s property industry
Investing in Scotland
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Investing in Scotland
Scotland remains a strong attractor for
foreign direct investment. It remains the
UK’s most attractive location for inward
investment outside of London for the 6th
year in a row
1
. Scotland performs well in
research and development - 24% of all UK
R&D investments were in Scotland, ahead
of all other regions including London.
Since 2007, business expenditure on R&D
has risen by 69.3% in real terms with spend
exceeding £1 billion in 2016. There’s growth
in sectors including subsea engineering,
where Scotland is a global leader with 600
companies generating over £7.5 billion
annually - 15% of the global market; and in
data science - particularly in Edinburgh which
hosts a world class supercomputing facility
and is home to the UKs leading research
university in data science and informatics.
Investors benet from a highly skilled
workforce. In fact Scotland has more world
class universities per head of population than
anywhere else in the world
2
. Four Scottish
universities are ranked in the top 200 according
to the 2018 Times Higher Education rankings
– that puts them amongst the top 1% globally.
The results of this are a nation that has
an innovative economy with Scottish
universities producing more spin-outs
than anywhere else in the UK.
ECONOMIC
STRENGTHS
INNOVATION AND
SKILLED WORKFORCE
1
EY Attractiveness Survey 2018
2
Universities Scotland 2018
Princes Street, Edinburgh
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Scottish cities are benetting from strong economic growth and a wave of private and public
sector led renewal initiatives. Glasgow is third for UK regional commercial property investment
outside London. Edinburgh is rst for predicted economic growth (UK Vitality Index).
Glasgow has agreed the largest city deal of any
in Scotland, at £1.13 billion. The programme
includes construction, infrastructure and
connectivity projects that will transform the
fabric of the city and wider metropolitan
region over the next 20 years.
Edinburgh is ranked as the 4
th
city globally
relative to its size for investment intensity. In
2016 international investment in Edinburgh
oces, as a proportion of total investment,
increased by 90%, up from the previous
year of 62% compared to 2014
3
.
Scottish
cities
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Scotsman Market Brieng, 22 May 2018
Aberdeen is an internationally recognised business
centre with globally competitive industries.
Westhill hosts Europe’s largest cluster of subsea
businesses, harbouring talent and skills being
exported globally. It is home to the £180
million Oil & Gas Technology Centre. Over
the past decade Aberdeen has attracted £2.67
billion of commercial property investment.
Dundee is undergoing a major transformation,
spearheaded by the £1 billion Dundee
Waterfront project, spanning 240 hectares
of land stretching 8km along the River Tay.
The project’s centrepiece, the V&A Museum
of Design Dundee, opened September
2018, rearming Dundee’s status as the
UK’s rst UNESCO City of Design.
Poise, Marischal Square, Aberdeen
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Investing in Scotland
Poise, Marischal Square, Aberdeen
Risk is further reduced by a planning system
that protects the value of investments.
Scotland oers a well-developed legal, advisory
and professional framework, and easy access
to nance, either in Edinburgh, one of Europe’s
leading nancial centres, or in London, the
global nancial capital. In the rst three
months of 2018, real estate investment in
Scotland reached £700m, a 32 % increase
compared to the rst quarter of last year
and more than every other place in the UK
outside of London and the South East
4
.
To reinforce this, the Scottish Government
has adopted a series of new and imaginative
initiatives that will keep Scotland at the
leading-edge in securing new investment.
We have researched the oer in other
places and believe our package of support
to be internationally competitive.
SUPPORTING CAPITAL
INVESTMENT
In a globally competitive market for capital investment, it is vital
that investors can easily access Scottish markets with minimised
risk. Scotland’s market is transparent with plentiful information
on pricing and property ownership.
4
JLL UK Capital Markets Q1 2018 Report
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CGI of Advanced Manufacturing and Innovation
District Scotland (AMIDS), Glasgow International
Airport
• If your premises are new builds, you won’t
have to pay business rates until 12 months
after the building was completed
• Business rates also don’t have to be paid
on new builds until they’re occupied
• New tenants will then qualify for business
growth accelerator relief for 12 months
• When existing property owners or landlords
expand or make improvements to their
premises, they won’t be charged for
12 months either.
Finance, Economy and Fair Work Cabinet
Secretary Derek Mackay has committed
that the new measures, combined with
favourable tax and rates levels, would make
Scotland “the most competitive place in
the UK for businesses to invest and grow.”
For more information about the
Business Growth Accelerator see:
www.mygov.scot/business-rates-relief/
business-growth-accelerator-relief
The Scottish Government has introduced a number of key changes
and reforms to Scotland’s business rates system. Most signicantly
included amongst a raft of changes and new measures is the Business
Growth Accelerator:
Scottish
Business Rates
CGI of Bothwell Street, Bothwell Exchange, Glasgow
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Investing in Scotland
In October 2017 the Scottish
Government launched a package
of policy and enabling measures,
including RIGS, to stimulate
growth and private investment in
new housing development in the
Build to Rent (BTR) sector
in Scotland. This sector is
being supported by the
Scottish Government as a
new way of providing newly-
built, good quality, private
rented housing at scale.
The Rental Income Guarantee
Scheme (RIGS):
• Will help developers and their investors
to overcome this challenge by oering
a guarantee which will compensate the
developer for part of the shortfall if the
expected levels of rent are not achieved
• Oers a Scottish Government guarantee of a
slice of the core rental income forecast to be
generated by eligible units during the initial
years of the operation of a BTR development,
when letting risk is likely to be at its highest
• Guarantee period will run for either three
or ve years from completion of units,
depending on an applicant’s requirements.
BUILD TO RENT (BTR) AND
THE RENTAL INCOME GUARANTEE
SCHEME (RIGS)
Buchanan Wharf, Glasgow
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EXPANSION OF AFFORDABLE
MID-MARKET RENT HOUSING
THROUGH INNOVATIVE FUNDING SCHEMES
The Scottish Government has built an impressive
track record of nancial innovation to deliver more
investment for more housing through government
guarantees, loans, grant recycling and new sources
of private funding. And we are committed to
supporting credible investment proposals which oer
the opportunity to deliver aordable, mid-market
rent housing schemes, at scale, across Scotland.
Golspie Street, Glasgow
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Investing in Scotland
Scotland’s Growth Accelerator (SGA) has
been established to help deliver innovative and
commercially viable infrastructure funding
solutions for major and complex development
and investment projects.
• £60m of SGA support used in delivering
advanced public infrastructure to support and
leverage £850m of private sector investment
in the Edinburgh St James development.
The project is a 16,000 sq. m. retail, leisure
and mixed-use development in the heart of
Edinburgh’s city Centre.
The SGA has the potential to aid the unlocking
of substantial levels of additional investment in
cities and regions across Scotland.
For more information see:
https://www.scottishfuturestrust.org.uk/storage/
uploads/Growth_Accelerator_-_Guidance.pdf
A recent example is the positive outcome of
the Mid-Market Rent (MMR) Invitation, an
innovative initiative designed to expand the
supply of aordable homes through a Scottish
Government loan term cornerstone loan
that will attract Institutional Investment.
The Housing Minister, announced (19
th
June
2018) that the Placemaking and Regeneration
Group, Places for People had been successful
in securing Scottish Government loan funding
of £47.5m for their proposal which will deliver
1,000 aordable mid-market rent homes.
Places for People have set up a residential real
estate fund which will own and deliver mid-
market rent homes, supporting people on low
and modest incomes to access high quality
rented accommodation at aordable rent levels.
The fund will look to attract pension funds,
including Local Government Pension
Scheme (LGPS) funds to invest and has
the potential to create a public/private
funding platform of around £150m.
Further information on this
announcement is available via
https://beta.gov.scot/publications/more-
homes-scotland-mid-market-rent-proposal
CGI of Edinburgh St James
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Investing in Scotland
Queen Street, Aberdeen
SPRUCE
The SPRUCE Fund was launched in
December 2011 to support and generate
investment in specic areas of Scotland.
Over £70 million worth of loans have been
provided to projects to date, including
housing, heating and oce developments.
Building Scotland Fund (BSF)
In December 2017, the Scottish Government
Budget announced the creation of a new
£150 Million Building Scotland Fund (BSF)
to support the development of new aordable
and private sector housing, modern industrial
and commercial space, and support industry-
led research and development. The aim is
that the BSF could deploy patient capital
in some cases to boost construction and
jobs as well as providing additional housing
supply and improved facilities to all businesses
to improve productivity and expand.
Scottish National
Investment Bank
The BSF is a precursor to the Scottish National
investment Bank, which will start operations
in 2020 and be capitalised with £2 billion over
its rst decade. The bank will provide a single
point of access for investment nance, and will
act to stimulate and crowd-in investment in
businesses, innovation and built infrastructure.
Financial
Innovation
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Scotland has long adopted a joined-up
approach across the Scottish Government
and all its agencies, and it takes working in
partnership seriously. To this end, Scotland’s
Real Estate Forum was established in
2016 following close discussions with the
Scottish Property Federation and was
established to underline the status of the
property sector as a key economic driver.
The aim is to work together to identify
and overcome issues to support greater
investment in places, jobs and the successful
delivery of real estate to support the
economy, wider society and government
objectives that attract investment and
support economic development aspirations.
Planning has a key role to play in delivering
Scotland’s Economic Strategy and has an
important role to play in making Scotland an
attractive place to invest, by ensure that future
growth reects the needs of communities
and that development is sustainable.
The Scottish Government is currently
undertaking a major programme of
planning reform, including a Planning Bill
that was laid in Parliament in December
2017. The reforms aim to streamline and
support development delivery, empower
communities to engage early, improve links
with infrastructure, strengthen planning
authority performance and embed an
enabling approach to planning that will help
to build investor condence in the system.
REFORMING
SCOTLAND’S
PLANNING SYSTEM
ENGAGEMENT
WITH SCOTLAND’S
PROPERTY INDUSTRY
Inverness Campus, Inverness
CGI of Magenta, Clyde Gateway, Glasgow
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Investing in Scotland
(CairngormMountainSnowsports)
DITTConstruction
(AberdeenUniversitylibrary)
(HywindFloatingoffshorewindfarm–Peterhead)
(CairngormMountainSnowsports)
DITTConstruction
(AberdeenUniversitylibrary)
(HywindFloatingoffshorewindfarm–Peterhead)
(CairngormMountainSnowsports)
DITTConstruction
(AberdeenUniversitylibrary)
(HywindFloatingoffshorewindfarm–Peterhead)
(CairngormMountainSnowsports)
DITTConstruction
(AberdeenUniversitylibrary)
(HywindFloatingoffshorewindfarm–Peterhead)
DITT Construction
Aberdeen University library
Hywind Floating oshore wind farm – Peterhead
Cairngorm Mountain snowsports
Investing in Scotland
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Investment
READY
Queensferry Crossing, Queensferry
SE/4763/Feb19
To nd out more about investing in Scotland
please contact in
vestme[email protected]
or visit www.scotland.org