Commercial ISSUE 8 | WInTEr 2018/19
On the waterfront The renaissance of Dundee l The changing face of Scotlandâ€™s ports l Commercial investment team: year one review l The resurgence of rural developers l Planning update
A positive outlook in the face of uncertainty SinCe our ﬁrst publication in 2015 some reference to the current political climate has understandably been hard to avoid in every issue. With Brexit on the horizon, this is true for this, our eighth issue, too. Suﬃce to say, the only thing we all know for certain about Brexit is that no-one really knows how, or indeed if, it will play out. What is certain is that life and business both go on. People need homes, businesses need oﬃces, industrial buildings, shops and other premises within which to operate. While the speciﬁcs may evolve over time with the development of new technologies, changes in working practices and generally how we choose to live our lives, the fundamentals of commercial property remain pretty much constant. Exciting opportunities exist in all market conditions and it is our job to identify and anticipate these on behalf of our clients. The commercial teams at Galbraith have a range of skills which see them dealing within a wide variety of commercial areas throughout Scotland and the rest of the UK. We continue to invest in our business and staﬀ so that we can constantly provide the very best service to our clients. Despite the uncertainty surrounding Brexit there remain a great many positive things happening in the market and we touch on some of them in this issue. Jamie Thain firstname.lastname@example.org 0131 240 6994
4 The Galbraith commercial investment team celebrates its first year. Can WeWork survive the changing market?
6 The multi-let industrial market: an update. The resurgence of small rural developers.
We provide a full range of property consulting services across the commercial, residential, rural and energy sectors.
COVER STORY: Renaissance on Tayside.
10 Deal round-up.
New opportunities in Scotland’s ports. Hi-tech property management.
Cladding due diligence. Reforming the Scottish planning system.
Cover picture: V&A Dundee © Hufton Crow.
Follow us on Twitter: @Galbraith_Group @Galbraith_COM
See us on Instagram: www.instagram.com/GalbraithGroup Join us on LinkedIn: www.linkedin.com/company/galbraith
When buildings are designed, there is often the desire to create something diﬀerent or at least involve a feature that will make the building stand out from the crowd. This was most certainly the case when the iconic Scottish headquarters of British Energy was built in East Kilbride. Orbital House is shaped like a cruciﬁx on plan and the four wings are centred on an impressive four storey atrium with a fullsized glass cupola. While the glazed cupola was an exceptional product for the early 1980s, many of the component parts had reached the end of their useful life. The cupola had been maintained and patched to try and extend the value that could be extracted from it, but it got to the point where full replacement was the only viable solution. Technology and manufacturing of bespoke glazed cladding products has advanced signiﬁcantly since the 1980s. However, replacing a glazed atrium that sits some 20 metres above the main common space within a fully occupied building is not a simple project. As much eﬀort had to go into designing the scaﬀolding and temporary protection as the cupola itself. We designed a self-supporting scaﬀold tower that ran all the way up the centre of the atrium, with a cantilevered platform to seal oﬀ the work area from the building below. This platform was fully protected with Corex sheeting and waterproof membranes to ensure no debris or water could reach the occupied areas of the building. Hoovers and wet vacs were left at this level to catch any issues quickly. An external work platform around the edge of the glazed cupola was also needed. A scaﬀold access stair was built oﬀ one of the third-ﬂoor balconies and a walkway was then formed oﬀ the pitch of the slate roof below the cupola. The imposed loads all had to be carefully scrutinised by a structural engineer so as not to overload any part of the building.
Galbraith provides a personal service, listening to clients and delivering advice to suit their particular opportunities and circumstances.
Like us on Facebook: www.facebook.com/ GalbraithPropertyConsultancy
Peter Scott Aiton sets out the complex task of repairing the cupola at Orbital House in East Kilbride.
14 GALBRAITH is Scotland’s leading independent property consultancy. Drawing on a century of experience in land and property management, the ﬁrm is progressive and dynamic, employing more than 230 people in oﬀices throughout Scotland.
Shedding light on a tricky project
Commercial Matters is produced by JK Consultancy, Glasgow, and designed by George Gray Media & Design, St Andeux, France. © CKD Galbraith LLP.
Page 2 | Commercial Matters | Winter 2018/19 | galbraithgroup.com
Finally, we designed a waterproof cover over the cupola that would prevent excessive water ingress during the works. All sorts of scaﬀold structures and tin roofs were investigated but ﬁnding something that could take the wind load in such an exposed location was not easy. The design team settled on having a bespoke thick
waterproof hap made. It was supported by the internal structural steelwork, but we had to draw on our contacts within the competition sailing world to establish the best way to tie it down. Instinct would tell you to tie it tight, the expertsâ€™ advice was the opposite. By tying the hap loosely, it allowed the wind to get under it and exit the other side without causing any damage. Once we had the site setup arranged, the replacement of the cupola was fairly straightforward. We insisted that the contractor had a site presence 24 hours a day while the cupola was oďŹ€. This meant that the hap could be supervised and any water ingress cleared up quickly. Although cupolas are great design features and allow good natural light, purchasers should be aware of the future liability and prohibitively expensive cost of replacement. The Galbraith building surveying team prides itself on being aware of such wider property implications. This sort of advice is always oďŹ€ered when commissioned to complete building acquisition surveys. Early awareness means that budgets and asset management approaches can be put in place from the outset.
email@example.com 0131 240 6967
galbraithgroup.com | Commercial Matters | Winter 2018/19 | Page 3
Commercial investment team gets oﬀ to a ﬂying start Jamie Thain looks back over the ﬁrst year of the new Galbraith commercial investment team.
it SeeMS incredible that Will Sandwell and i are not only through our ﬁrst year at Galbraith, but also now well into the second. time ﬂies when you’re having fun! We have also been very busy. That is, busy getting to know the ﬁrm, securing investment deals and building a pipeline of future work through existing and new relationships. Galbraith is certainly a diverse business and it has been very interesting getting to know what all of our colleagues do within the various strands of the business. From all aspects of rural property, residential agency, planning, energy, forestry, building surveying and of course our colleagues in the commercial agency, asset management, planning and property management teams. This has been made very easy due to the collegiate approach adopted by everyone in the ﬁrm. From an investment perspective, over this period we have dealt with a wide range of projects, totalling more than £115m in transactional value, including industrial, retail and oﬃce acquisitions, a shopping centre sale and hotel development fundings, with 22 concluded transactions. We have been involved in transactions ranging from £500,000 to £50m – and each client can expect the same level of service and advice. An aspect of the Galbraith business which has really stood out for us is the number of clients who use the ﬁrm’s expertise across many, and quite often very diverse, services. This can only be due to the high level of personal service along with market-led advice which our clients have come to expect from across the business. We are happy to be part of the expanding commercial team, continuing to oﬀer these service levels to our clients both new and existing.
In our second year, we continue to grow our market share and deal volume and got oﬀ to a ﬂying start with both acquisitions and sales in the industrial, oﬃce, retail and serviced apartment sectors. We also sold a state-of-the-art veterinary hospital in Glasgow city centre, which provided a 15-year lease term. The summer slow-down allowed us to take a short holiday and prepare our sales for H2 2018, which include an exciting multi-let industrial portfolio called ArC. It comprises four estates across Scotland and was launched in September at oﬀers over £8m / 8.80%. Industrial continues to be a very popular sector among investors so we anticipate a positive result for our client. Galbraith has certainly lived up to our expectations of a diverse, entrepreneurial business which provides exceptional service to all its clients, and we are excited to be part of its future. We would be delighted to hear from you should you feel that we can assist with your commercial property investment requirements. firstname.lastname@example.org email@example.com
Page 4 | Commercial Matters | Winter 2018/19 | galbraithgroup.com
0131 240 6994 0131 240 6997
Above: Will Sandwell and Jamie Thain. Below: Industrial acquisition – HSS, Bellshill. Right: Multi-let oﬃce acquisition: Portland House, Glasgow.
WeWork: A case of boom... and bust? Harry Trotter explores the sustainability of the American serviced oﬃce giant.
the rise of serviced or ﬂexi oﬃces has been nothing short of remarkable over recent years. This is due primarily to the largest and most famous of them all: the behemoth that is WeWork. While the American company’s prominence in the London and new York markets has been emerging for some time, we are now seeing the ripple eﬀect around the wider UK oﬃce markets. In 2010 the ﬁrst WeWork was set up in the Soho district in new York. Just seven years later they occupy 14 million sq ft across the globe and owe $18bn in rent. In the UK alone they are signed up to 41 leases, totalling 3.06m sq ft of oﬃce space with a rent roll of £3.02bn over the next 24 years. The stats alone are staggering, but what have WeWork created that is so attractive to investors? The answer is really quite simple: they have created a community. They have created spaces employees want to be in. WeWork stole a march on many landlords by creating cool and funky oﬃces when there was nothing else like it on the market. not only do the spaces look good, but also the services on oﬀer had never been available before: co-working areas, quirky meeting spaces and breakout areas, table tennis, endless coﬀee and free drinks on Fridays. It became cool to work in a WeWork and everyone wanted to be in one. Since launch, the company’s growth has been exponential and shows no signs of slowing. There are, however, warning signs ahead for WeWork and others who follow suit. A Property Week analyst who wishes to remain anonymous said: “One of the worries the industry has – and it’s unproven to date – is what happens if we go through a stickier patch with the economy. The company’s business model is predicated on full occupancy, or as close to full occupancy as possible, and in a downsize scenario where occupancy rates fall to 50%, there is a question mark about how viable this model becomes. “I have a horrible feeling WeWork are going to hit some rocky times because they have grown so quickly and taken great big chunks of space at enormous rents with rent-free periods that are starting to come oﬀ soon and it does worry me that this could be like the dotcom bubble.” He cites the cautionary example of
regus, which ﬁled for bankruptcy in the US some time ago. One of the root causes of the ﬁrm’s initial downfall was the number of long leases on empty buildings it was left holding. There can be no doubt that such quick growth of WeWork will lead to trickier times in tougher markets. WeWork have indeed started – and there are early signs of success – targeting larger occupiers on longer leases in order to secure longterm rental income over larger chunks of space. A sensible decision, but will large occupiers want to be in such a heavily branded WeWork building? Branding and representation has always been a negative of the serviced model – is this going to change? Landlords are now heavily investing in
I have a horrible feeling WeWork are going to hit some rocky times because they have grown so quickly.
creating their own serviced concepts or co-working operations within their buildings or indeed purchasing serviced oﬃce providers themselves. They have caught up with creating the funky spaces and have neither the debt nor the monumental rent roll that WeWork have taken on. The oﬃce landscape has changed dramatically over recent years and will continue to do so as the presence of serviced or ﬂexi oﬃces becomes more integrated with the traditional oﬃce market. It is likely that we will see a greater blurring of the lines between conventional and more ﬂexible space as the demand for ﬂexibility and innovation from occupiers continues to grow. It remains to be seen if WeWork can continue to survive at such a trajectory, but what is clear is that occupier demands of their working environment continue to evolve. Shrewd landlords will keep listening to these demands in order to keep up.
firstname.lastname@example.org 0131 240 2288
galbraithgroup.com | Commercial Matters | Winter 2018/19 | Page 5
Flying under the radar Jamie Thain provides an update on the Scottish multi-let industrial market.
the headline deal volume ﬁgures across the Scottish commercial property investment market so far this year have been above the long-term average at around £1.4 billion by the half year. A number of large oﬃce, retail and hotel deals stole the headlines and rightfully so, however, we have also had a very active time in the multi-let industrial market. So far, this year there have been 17 multi-let industrial transactions in Scotland, totalling around £124 million in value. A few large deals made up some of these numbers including: Canmoor/JCAM’s completion of the Westway Park, Glasgow deal in March for £37m, reﬂecting 8.90%; regional rEIT’s sales of Wardpark Industrial Estate Cumbernauld for £26.40m and The Point, Glasgow for £14.10m; and Aberdeen Standard Investments’ purchase of Clyde Gateway East for £10.65m, reﬂecting 6.10%. Of the remainder, 12 deals done this year have been below £5m in lot size and where these deals have hit the market they have quickly become a hot commodity and generally achieved well in excess of
Lack of available opportunities is likely to dictate the volume of transactions over the rest of the year rather than lack of market appetite.
asking prices. For the best multi-let stock (solid locations, modern units) we have seen as many as 14 investors bidding at individual closing dates. 2018 has seen as many purchases by private investors and small property companies as by larger property companies, rEITs and institutional investors. This tells us that private investors are attracted to the yield proﬁles (which at between 6.00% and 9.00% reﬂect a fair property risk premium over bonds) and that they are increasingly willing to take on active management opportunities. Good multi-let stock remains in demand from across the investor spectrum. However, the lack of available opportunities is likely to dictate the volume of transactions over the rest of the year rather than lack of market appetite. now more than ever it is important to take considered professional advice when buying or selling. The Galbraith commercial investment team is very active in the Scottish industrial market and would be delighted to assist you with your investment needs.
email@example.com 0131 240 6994
Page 6 | Commercial Matters | Winter 2018/19 | galbraithgroup.com
The houses that private equity built Harry Stott explores the resurgence of small rural developers.
it haS been well documented in recent years that the PLC housebuilders are back in business. With increased demand for the end product, and a signiﬁcant restructuring of their funding models, they are actively seeking opportunities. Since the recession in 2008 it has been diﬃcult for the small rural developers to obtain lending through the traditional channels of development funding – the banks. In fact, funding was so challenging that many small developers ceased to trade or turned their attentions to small contract work to tide them over in the lean years.
Top: Wellington Business Park, Aberdeen, where the industrial sector is recovering well in line with the increase in oil pricing. Middle: Clyde Gateway, part of the ARC portfolio sale. Bottom: Multi-let industrial remains an attractive sector.
These challenges still exist for small developers as banks remain very cautious and only willing to lend on schemes producing the best returns in proven locations. This reluctance from banks to lend on speculative development, coupled with the huge amount of scrutiny developers are subjected to and the requirement to put up signiﬁcant deposits all adds to the tremendous pressure already weighing on project viability. As conﬁdence has grown in the market, we have increasingly seen small developers turning to other sources of funding to get projects oﬀ the ground – most notably private equity funding. This new funding source involves a high net worth individual or consortia of investors providing funding to a developer for site purchase and development costs in return for a proportionate share of the proﬁts through the sale proceeds. There are of course various ways of structuring a funding partnership of this type and there are still some associated risks, so the balance of input from the funder and developer varies from project to project. The beneﬁt to the developer is more ﬂexibility and liquidity, as partnering with a less riskaverse funder who does not have to adhere to a corporate structure, internal regulation, and restrictions brings big advantages. The beneﬁt to the private equity funder is they have greater control over the process with a direct link to the expertise of the developer and, depending on the structure of funding package, greater returns to suit both parties. This model of funding has led to greater liquidity in the market and an increased demand for rural development sites, which in previous years would have struggled to attract signiﬁcant interest.
firstname.lastname@example.org 01786 434 630
galbraithgroup.com | Commercial Matters | Winter 2018/19 | Page 7
the opening of the V&a Dundee in September 2018 attracted international acclaim and admiration for the city and realises a 30-year vision to transform not only the Waterfront but the city as a whole. Indeed, the Waterfront development is rightly viewed as a catalyst for the city’s renaissance, given its proud history of innovation, industry and resilience. It also signiﬁes the changing of the guard, with robin Presswood taking over from Mike Galloway as executive director of city development at Dundee City Council. Latterly head of economy, planning and employability at Fife Council, robin’s successful career to date includes posts with Angus Council, Tayside regional Council, and various positions with Dundee District Council, nHS Tayside and the Scottish Arts Council.
Renaissance on Tayside Dundee’s executive director of city development, Robin Presswood, tells Jo Plant and Jay Skinner about the 30-year vision to transform the city.
Having witnessed the ongoing renaissance of Dundee, robin is buoyed and delighted by the recent re-emergence of the city. “Dundonians can feel immensely proud of their city,” he said. Dundee is thriving, as evidenced by the V&A Dundee, a new multi-million-pound cultural hub and museum developed as part of the £1 billion Dundee Waterfront project. The site covers some 240 hectares and comprises retail, leisure, commercial, residential and public realm uses. While there is still much to do, the project has already had a positive eﬀect on the economy and vacancy rates in the city centre are continuing to fall. robin commented: “Both the V&A Dundee and the wider Waterfront project have been some 30 years in the making and pay homage to the tireless eﬀorts of a group of individuals across a range of sectors, organisations and backgrounds in bringing the development and vision to fruition.” Chief among these innovators was Mike Galloway, whose unwavering support for the Waterfront scheme has been pivotal in its success to date. And robin is certainly not resting on his laurels. One of his key tasks is to attract further investment to the city to facilitate the delivery of the remaining development opportunity sites and ensure the Waterfront’s legacy is realised.
that there continue to be tangible outcomes from the Waterfront project, speciﬁcally the ongoing creation of jobs and business opportunities for the local community which the developments should serve ﬁrst and foremost.”
A key objective of the project is the creation of several thousand new jobs, which will beneﬁt not only Dundee but the wider Tay City region. robin continued: “A renewed focus on employability is essential in continuing to realise the potential of this long-standing vision.”
It is clear that while robin welcomes the positivity surrounding the Waterfront project and the ongoing renaissance of the City as a whole, he is very much aware of the work still ahead. His enthusiasm for and dedication to Dundee and its inhabitants is evident.
Collaboration will continue to be key in successfully delivering the whole masterplan vision. “Political unity helped facilitate decisionmaking and the relatively small size of Dundee as a city has been a strength in encouraging positive discussions during the formulation of the proposals,” said robin. “This allowed a strategy to be put in place that reﬂected an agreed longterm vision with engagement at its core.”
The Waterfront project allows Dundonians to reclaim an area of the city that is held dear by many. By eﬀecting positive change, the local community can take pride in the Waterfront and promote the city and its strengths on a global scale. From economic and cultural perspectives, the continuing work will help to secure the ongoing renaissance of Dundee as it once again takes centre stage as a driver of innovation and enterprise.
Robin Presswood: “I have both a professional duty to and a personal attachment to the city.”
There remains a need to ensure that the infrastructure is in place to deliver the Waterfront masterplan, and robin is encouraged by the commitment given to this by the Scottish Government and key infrastructure providers.
robin, who has lived in Dundee for 30 years, added: “I have both a professional duty to and a personal attachment to the city. I want to ensure
Page 8 | Commercial Matters | Winter 2018/19 | galbraithgroup.com
0131 240 3030
0131 240 6978
The stunning V&A Dundee is the architectural centrepiece of the 240-hectare Waterfront development. Photos V&A Dundee ÂŠ Hufton Crow.
galbraithgroup.com | Commercial Matters | Winter 2018/19 | Page 9
34 Melville Street, Edinburgh.
Forth House, Edinburgh.
new Broompark, Granton
160 Dundee Street, edinburgh
Galbraith continues to act on behalf of Buccleuch Property in letting business units at New Broompark, Granton. Galbraith has recently assisted in the letting of Units 2 and 3 to Move On Wood Recycling and the expansion by an existing tenant, The Renegade Chef, into Unit 16. The park has one available unit, extending to 2,124 sq ft.
Following the recent acquisition of 160 Dundee Street by specialist UK real estate asset and investment manager, APAM, Galbraith has continued to act as joint letting agents on the building alongside JLL. Galbraith advised on the letting of part of the third ﬂoor to Hillcrest Housing Association, which extends to 3,536 sq ft. The building is now fully let to a range of tenants, including Alzheimer Scotland and BellGeospace Ltd.
Lycetts’ relocation Acting on behalf of Lycetts Insurance Brokers, Galbraith advised on their successful relocation from George Street to Hanover House, 45 Hanover Street, Edinburgh. Lycetts has taken 2,110 sq ft of open plan and cellular space within a traditional Georgian mid terrace, category B Listed multi-let building.
Silvermills Court, edinburgh Silvermills Court in the Scottish capital’s New Town is now fully let, with Achievability taking the remaining suite, which extends to 1,453 sq ft, as their ﬁrst oﬃce outside London. The ground ﬂoor suite is situated within an attractive landscaped courtyard development, which oﬀers good quality, bright and airy oﬃce accommodation.
Kindred Capital, London Galbraith acted on behalf of venture capital ﬁrm, Kindred Capital, in their relocation in London from serviced oﬃces to an oﬃce on Sekforde Street, Clerkenwell. Kindred Capital is an £80m seed and early stage venture capital investor, focusing on European technology companies.
the Stamp Oﬃce, edinburgh On behalf of Chiltern International Limited, Galbraith advised on the assignation of their leasehold interest in the third ﬂoor of The Stamp Oﬃce at 10 Waterloo Place, which extends to 7,583 sq ft, to QueryClick Ltd.
75 Aberdour Road, Dunfermline.
Page 10 | Commercial Matters | Winter 2018/19 | galbraithgroup.com
INvESTMENT TRANSACTIONS Forth house & Playfair house, Forth Street, edinburgh Galbraith advised Thistle Property Group on the investment acquisition of Forth House and Playfair House in Edinburgh’s city centre. Forth House is a traditional sandstone oﬃce building in Edinburgh’s New Town and let in totality to Forth Radio. Playfair House is an open-plan ﬂoor plate oﬃce multi-let to ﬁve diﬀerent occupiers, connected to Forth House via a link building. The asset produces an annual rent of £313,000 p.a. and was acquired for £4.5m reﬂecting a net initial yield of 6.56%.
Braid Serviced apartments, thistle Street, edinburgh In an oﬀ-market transaction, Galbraith identiﬁed and acquired a newly redeveloped serviced apartment building for Mansley Group, a leading owner occupier of high quality serviced apartments. The building provides 20 apartments. The price is conﬁdential.
thornbridge timber, Laurieston Road, Grangemouth In a sale and leaseback transaction, Galbraith advised UK property company Topland Group on the investment
123-145 North Street, Glasgow.
Summit Point, Watt Place, Hamilton International Park. purchase of the Thornbridge Timber industrial and distribution facility, which extends to 88,000 sq ft with signiﬁcant concrete storage yard on a 7.07 acre site. The investment provides an annual rent of £388,261 and is let for 10 years. The price was £4.90m, reﬂecting an attractive net initial yield of 7.50%.
123–145 north Street, Glasgow Galbraith was instructed to sell 123-145 North Street, Glasgow, on behalf of Buccleuch Property. The ground, ﬁrst and second ﬂoors of the property comprise a newly ﬁtted, state-of-the-art veterinary hospital occupied by Vets Now, the UK’s leading provider of emergency care for pets. The third ﬂoor is occupied by Geason training, one of the UK’s leading construction training organisations. The investment was sold for a price of £2.9 million, reﬂecting a net initial yield of 6.67%.
Unit e, Watt Place, hamilton international Park We advised a property company client on the investment acquisition of Unit E, Watt Place, Hamilton International Park. The high quality industrial property extends to 25,189 sq ft and is let to GB Gas Holdings. The property was purchased in an oﬀ-
market situation for £2.215m, reﬂecting a net initial yield of 6.37%.
75 aberdour Road, Dunfermline Galbraith identiﬁed and acquired this neighbourhood retail investment on behalf of a property company client for £920,000, reﬂecting a net initial yield of 8.72%. The property is let to Barnardo’s, Ladbrokes and Marini’s.
25-27 Bridgegate, irvine Galbraith were instructed to sell 25-27 Bridgegate, Irvine on behalf of a private client. The retail unit occupies a prominent location of the south side of Bridgegate and is let to Barnardo’s at a rent of £25,000 p.a. The property was sold for a price of £225,000, which reﬂects a net initial yield of 10.81%.
34 Melville Street, edinburgh Galbraith has recently completed the oﬀmarket sale of a full townhouse in the West End of Edinburgh, on behalf of Vardy Property Group. The townhouse holds a prime pitch on Melville Street and beneﬁts from vacant possession. The Category A Listed property was sold to Strathberry as their new HQ for £1.60m, reﬂecting an attractive capital rate of £388 per sq ft.
Braid Servcied Apartments, Thistle Street, Edinburgh.
Thornbridge Timber, Grangemouth.
galbraithgroup.com | Commercial Matters | Winter 2018/19 | Page 11
Richard Higgins discusses the commercial land-based opportunities around the resurgent ports and harbours of Scotland.
aS a maritime nation, the ports and harbours of the UK have been a vital and vibrant part of our collective infrastructure over centuries.
Despite the signiﬁcant changes in how we now live and service our trade and industry, the ports and harbours remain critical assets and generate opportunity for the wider areas that they serve. In April 2018 the Scottish Ports industry, in conjunction with Scotland’s enterprise bodies, published Scottish Ports: Gateways for Growth. Lorna Spencer, chair of the Scottish Ports Group, said at the launch of the report: “Scottish ports are fundamental to the Scottish and UK economies. This document and initiative highlights the unique role Scottish ports play, not only in providing a base for trade and employment, but in connecting communities. Ports provide the landside gateways for Scottish trade as well as acting as a hub for vital industries such as oﬀshore energy, ﬁshing and the cruise sectors. It is estimated that each year Scottish ports contribute £1.9bn in gross value added to the economy.” The ports themselves rely on land-based connectivity and resources, not least road and rail networks, availability of a skilled workforce, and land and buildings to accommodate shore-based activities. Ports act as focal points for the supporting service industry across all sectors and it is no coincidence that much economic development centres around them. 95% of trade comes through seaports with Scotland handling more than 67 million tonnes of freight annually (more than double that of England), requiring more than
Ports act as focal points for the supporting service industry across all sectors and it is no coincidence that much economic development centres around them. 21,000 cargo vessel movements each year. Freight is only part of the wider activities. The oil and gas sector is a heavy user of ports, particularly in the north east, and the skills, supporting industries and infrastructure which have grown over the last 50 years, are deployed into the increasingly important renewables sector. The decommissioning of the north Sea and the next round of oﬀshore wind and other renewable developments will provide work for many years to come to surrounding ports. Construction has now started on Aberdeen Harbour Board's £350m development of additional facilities in nigg Bay, to the south of the existing harbour. Further improvement and redevelopment works are also underway at Peterhead, Montrose, and Kishorn among others. As well as the recognised users, including ﬁshing,
defence, marine support and survey vessels, oil and gas, etc, the importance of leisure and tourism is well demonstrated at Dundee with the Waterfront redevelopment. Cruise tourism at Invergordon welcomed more than 150,000 passengers in 2017 – higher than anywhere else in Scotland. It is marketed as ‘the small friendly village with the big cruise liner port’, and is planning a £23m capital expenditure to build a new quayside. The economic development opportunities are signiﬁcant in the more ‘remote’ ports (from the land perspective) and, given the importance of marine trade and activity and future opportunities, the position looks bright. Land-based opportunities around the ports are huge and the continued activity will support the wider-based economies all of which require business premises, oﬃces, hotels and a supply chain to operate.
email@example.com 01786 434 625
Page 12 | Commercial Matters | Winter 2018/19 | galbraithgroup.com
Work in progress: Construction is under way at Aberdeen Harbour Board’s £350 million development in Nigg Bay and at Kishorn in the Highlands (above).
Property management systems on cloud nine Jill Gayford looks at the beneﬁts of investing in award-winning technology
the Galbraith property management department is a key area of growth. to support this, the ﬁrm has recently invested in Qube, an award-winning, fully cloud-based property management software system. One of the main advantages is the increased eﬃciency in reporting practices to clients and tenants. Another key beneﬁt is accessibility. Our surveyors have remote access to crucial property information wherever they are; in meetings with clients or tenants, in-house, on or oﬀ-site. The live bank balance feature allows surveyors to control their service charge budgets and cash ﬂows on a daily basis. This transparency allows timeous and accurate management of service charge budgets and expenditure. In turn, this enables precise strategic forecasting to implement additional proactive works or to provide tenants and clients with information about potential overspend. With Qube we have fully integrated our property management (leases) and accounting information into a single system, making reporting more accurate and less time-consuming to complete at critical times, such as month and year end. The system’s workﬂows and document manager features have freed up admin time to focus on customer service. A prime example of this is a new, more streamlined accounts payable process that involves less time and signiﬁcantly less paper. Supplier payment runs are easier to process and suppliers are paid more swiftly. In the future, we aim to go completely paperless. In all, Qube allows us to provide a faster, more eﬃcient and accurate service to our clients and tenants by giving us improved access to data, transparency and speed of response. We’re continuing to develop the system and adapt it to our working practices. Our clients, tenants and our own team are delighted with the improvements.
firstname.lastname@example.org 0131 240 6987
galbraithgroup.com | Commercial Matters | Winter 2018/19 | Page 13
Cladding due diligence George Bouwens sets out seven key considerations.
Stirling oﬃce welcomes new graduate LUCy yATES joins the Galbraith Stirling team as a graduate commercial surveyor where she will be working on agency, valuation and development projects alongside associate Harry Stott and partner Richard Higgins. Originally from North Berwick, Lucy has studied and worked across Scotland. She recently completed a masters in real estate management and development from Edinburgh’s Heriot Watt University and also has a degree in international hospitality management from Robert Gordon University in Aberdeen. As an undergraduate, Lucy gained a year of work experience at the ﬁve-star Gleneagles Hotel as chef de rang in the Strathearn Restaurant and, following graduation in 2016, she worked for six-months as a chalet host for a luxury chalet company in the French ski resort of Val d’Isère. Although the move from hospitality to real estate might seem unusual, the two industries share similar skillsets – and a strong focus on client relationships. This was bolstered by Lucy’s passion for the built environment, and the diverse workload the industry oﬀers both in the oﬃce and onsite. email@example.com 01786 435 046
FOLLOWinG recent high-proﬁle incidents, the materials and speciﬁcation used to clad buildings remains under the spotlight and has implications for contractors, landlords and tenants.
property with suﬃcient escape routes and low risk use has a reduced level of risk than a multi-storey building where the risk is greatly increased and additional safety systems such as sprinklers may need to be installed.
As building construction technology and building regulations have evolved the design and use of certain materials has been superseded. Change and improvements are nothing new in the built environment, but neither is preservation or refurbishment of existing and older properties. Our building consultancy team works on a daily basis with all types of buildings which use cladding systems. Here we outline some of our key considerations:
Knowledge of materials and products Cladding is used for many reasons and often performs various roles as part of a building’s fabric, sometimes for aesthetics and sometime insulation, for example. It is used across all sectors in oﬃces, industrial buildings, hotels and residential dwellings. Older cladding is not automatically noncompliant or obsolete. Buildings clad with composite or rain screen panels containing core material which may be ﬂammable in isolation can still be regarded as perfectly ﬁt for use. Identiﬁcation of the cladding and its composition is the ﬁrst stage of any survey.
The design and application of cladding has to be understood just as much as the product speciﬁcation. This is perhaps the most recent focus following a disastrous realisation of the ‘chimney eﬀect’ which can arise in some instances when a building is retrospectively ‘over-clad’. Application, including ﬁxing speciﬁcations and ﬁre barriers, can be identiﬁed on site via a survey or through a review of construction documentation.
Condition The insulation core of a composite panel or the general core of a rain screen panel is protected by the composite components and this reduces the opportunities for ignition. All cladding should be well maintained. The complete wall build-up and speciﬁcation, position of cavity barrier, ﬁxings and standard of construction are also all important factors. Beyond general wear over time, where we ﬁnd cladding to be in poor condition this has normally arisen through improper installation or retrospective repairs where third party materials may have been used.
the use of the building
installation of other ﬁre mitigation systems
In relation to wider ﬁre safety, a clear understanding and assessment of the building use is important. For example, a single-storey
Although not all buildings require them, if the building is ﬁtted with a sprinkler system throughout, is it operational, are the ﬁre alarm
Page 14 | Commercial Matters | Winter 2018/19 | galbraithgroup.com
Planning update: Reforming the Scottish system Jo Plant reports on the progress of the Planning (Scotland) Bill.
the Scottish Government announced an independent review of the Scottish planning system in autumn 2015. Informed by the ﬁndings and recommendations of an independent review panel, 20 proposals for reforming the planning system were put forward by the Scottish Government in January 2017 in a consultation paper entitled Places, People and Planning. A Position Statement was subsequently published in Autumn 2017 that sought to clarify the amendments proposed. The Planning (Scotland) Bill was introduced to the Scottish Parliament in December 2017. The key proposals include:
systems tested and fully operation and the correct technical speciﬁcation for the building, and are all the ﬁre exit routes clearly marked and compliant?
insurance A clear understanding of the cladding product used will often be required for insurance purposes. A requirement for this is now more regularly coming to light during any purchase, sale or leasing transactions.
Further investigations Identiﬁcation is key to all of the above. In some instances a product cannot be fully identiﬁed. In this case we recommend parties should be prepared to instruct additional investigations which will normally involve a review of original construction documentation (where available), liaising with cladding manufacturers to establish the supplied product’s speciﬁcation (most provide such information free of charge) or even undertaking a specialist intrusive survey. By following these basic principles, with a good ﬂow of information and parties working together we often ﬁnd that a clear level of information can be obtained to satisfy all stakeholders involved in a transaction.
firstname.lastname@example.org 0131 240 3031
• Abolition of strategic development plans and statutory supplementary planning guidance • Incorporation of Scottish Planning Policy into the national Planning Framework and the inclusion of the latter into the development plan • reforms to the preparation of local development plans, with plans to be in place for 10 rather than ﬁve years, but with a right to amend during that time (this longer timeframe will be important for landowners/developers to bear in mind when seeking land allocations in local development plans). The national Planning Framework will also be reviewed every 10 years • Creation of local place plans to allow communities to prepare plans for their area.
Development management • A return to the use of conditions (as opposed to directions) to specify time limits on planning permissions • Amendments to the pre-application consultation process for national and major development proposals requiring planning applications to be submitted within 18 months of the consultation with the local community • Provision through secondary legislation to determine a wider range of planning applications through delegated powers • Changes to Section 75 of the Act to allow for the payment of money as a planning obligation that is unconnected with a limitation to regulate or restrict the use of land • Amendments to procedures dealing with applications to vary existing Section 75 Agreements to allow the
determining authority to propose alternatives, not simply approve or reject the applicant’s proposals • Allow for a community infrastructure levy to be brought forward through secondary legislation. While there is limited detail, the Bill conﬁrms the levy will be payable to the local authority and will sit alongside other development obligations secured under Section 75 or similar.
Performance • Mandatory training for councillors who will be prohibited from carrying out certain functions (such as sitting on a planning committee or local review body) until they have completed it • Increased monitoring of planning authorities by the Scottish Ministers, including a power to direct a planning authority to take speciﬁed steps to improve performance. There is currently no reference to third party rights of appeal. As of late August 2018, more than 90 amendments to the Bill have been put forward. In addition to deletions and reﬁnements to the provisions in the Bill, there are a wide range of new proposals. Various amendments propose the introduction of community/third party rights to appeal planning decisions. Another proposes no right of appeal for land not allocated for development purposes in the relevant local development plan. There are also proposed amendments to require planning applications for: • Development relating to agriculture and forestry • Private ways (access tracks) for ﬁeld sports • Holiday/second homes, including short-term holiday lets. It will be interesting to note the Scottish Ministers’ responses to these proposed amendments and the outcome of the Parliamentary debate as part of Stage 2 of the legislative process later this year. In particular, widespread concern among MSPs regarding the existing appeal system (which is seen by many as favouring developers) was a key theme during the Stage 1 debate.
email@example.com 0131 240 3030
galbraithgroup.com | Commercial Matters | Winter 2018/19 | Page 15
OUR EXPERTISE l Asset management l Building surveying l Commercial valuation l Facilities management l Investment consultancy l Professional services l Project co-ordination l Property management
CONTACTS George Bouwens Building surveying 0131 240 3031
Martin Cassels Building surveying 0131 240 6992
Jill Gayford Property management, asset management, professional & valuation 0131 240 6987 firstname.lastname@example.org Pamela Gray Asset management, professional & valuation, property management 0131 240 6963 email@example.com
l Sales, lettings & acquisition
Richard Higgins Agency (investment, oﬀice, retail & industrial), asset management, professional & valuation 01786 434 625 firstname.lastname@example.org
In addition to our specialist
Calum Innes Agency (development & commercial), planning, project co-ordination, professional & valuation 01738 456 075 email@example.com
services, we manage in excess of £450 million of commercial property across the UK. We deal with around 750 tenants in more than 120 properties
Nicola MacGruer Planning, professional & valuation 0131 240 6968 firstname.lastname@example.org
from single units to large multi-let environments such as shopping centres.
Pam Over Asset management, project development & co-ordination, property management 0131 240 6965 email@example.com Jo Plant Planning 0131 240 3030
Will Sandwell Investment agency 0131 240 6997
Peter Scott Aiton Building surveying 0131 240 6967
Harry Stott Agency (development & commercial), planning, professional & valuation 01786 434 630 firstname.lastname@example.org James Taylor Building surveying 01786 434 610
Jamie Thain Investment agency 0131 240 6994
Lewis Thompson Building surveying 0131 240 6964 Harry Trotter Asset management 0131 240 2288
Oﬀices across Scotland | Sales & Lettings | Farm & Estate Sales & Acquisitions | Commercial | Rural | Energy Forestry | PropertyMatters & Land|Winter Management Sporting | Agricultural Loans | Subsidy Trading & Advice Page 12 Commercial Matters 2017-18 ||galbraithgroup.com 2018/19| galbraithgroup.com Winter 16 || Commercial Page