Experienced property consultant Robert McDowall reflects on the Scottish Government’s Regeneration Discussion Paper and offers his take on the prospects for future physical regeneration activity.
Having attended the launch of the ‘paper’ and now having had the opportunity to read its content, the first think I would have to say is that any debate on regeneration is welcomed. It is perhaps some time since the last platform was raised on this important topic, but this time around the overwhelming issue is the state of the economy across a whole range of factors.
The state of play
Regeneration normally stems from two important aspects: the underlying property market (influenced mainly by the economy) and funding availability within the public sector.
Of course, it has not always been the case that public sector ‘pumppriming’ monies have been needed. These occasions have normally been driven by the strength of the property market, which in turn has been reflected in the relative underlying strength of the economy in the past.
The paper has a balanced focus between local and wider regeneration. It faces up to the fact that ‘traditional models of regeneration are now fractured’. It reflects upon the current ‘era of constrained budgets’ and mentions ‘consideration of new and sustainable ways of funding physical regeneration’.
Tell us something we don’t already know, I hear you say!
Well that’s part of the problem, I say!
We all know that the banks have been playing things very tight in recent years and that will likely continue. We know that public sector finances are stretched and in some cases already leveraged. We know that the URCs still need public support.
We know that publicly sponsored and appropriately partnered special purpose vehicles are finding things difficult. We know that rail proposals linking city centres and airports in both the
east and west have been mothballed. We know that trams in the east have more than enough problems to be getting on with and finally, we know that the Commonwealth Games in 2014 is the most important single focus project that we have.
So where does this leave us, we all say?
The private sector will be very selective in where it invests. It is now less reliant on public sector funding, because it knows there is very little around and therefore the more marginal schemes will not make it through the corporate decision making process. This means that fewer projects will come forward; we have all seen that pattern in recent years.
Location will continue to be key, whether that is in housing, retail/commercial or mixed use developments. We see this currently in new housing starts, extensions to retail shopping, food store expansion etc.
Development activity is restricted to certain key locations where in housing terms there is a market for affordable family housing. In other sectors, the drivers are either footfall and/or destination-led development and this is only happening in certain areas. Timescales will continue to be stretched in the expectation that there are better times ahead.
Re-shape or prepare to wait
So, times are tough and money is tight – in such circumstances property development tends to be selective. The question for us involved in regeneration is – is there a major development coming to a place near you?
If the answer is yes – you will see and be engaged in regeneration activities which will involve a re-shaping of previous Masterplans to take account of the current and likely emerging marketplace.
If no – you will likely see previous Masterplans continuing to gather dust on the shelves as you wait for a significant hike in the marketplace and/or a return to public sector pump-priming (both unlikely in the foreseeable future).