The pride of Scotland and a property hotspot

Edinburgh has a lot going for it in terms of having a thriving financial and technology sector, world-class universities and a rich history. It also has lower property prices than London, a high standard of living and is undergoing some major regeneration projects across the city.

Those factors should be more than enough to entice overseas property investors to think outside of London and focus on Scotland’s capital city instead. Edinburgh also has a higher percentage (77.8%) of its working age population in employment than any other major UK city. That makes for a healthy labour market which underpins its strong economy.

Along with its economic and business credentials, Edinburgh is a picturesque city steeped in history and with roots dating back to the medieval times. It has a number of stunning natural and man-made landmarks including a famous castle that sits high above the city.

 

Financial hub

While London is one of the world’s leading financial hubs, Edinburgh is also seen as a significant financial centre within Europe. It is home to a large number of banks, insurers and fund managers.

 

 

In fact, Edinburgh is ranked the number two city after London in terms of economic growth. As a world-class city it attracts a high level of foreign investment as the UK’s second biggest financial centre. It also has a thriving technology scene.

Salaries are also high in Edinburgh and the average hourly pay was £15.00 in 2018, which is at least £1 higher per hour than seven other major UK cities. This could be partly due to the fact that a large proportion of workers are in high skilled occupations. At 37.8% of all workers, this is more than other UK cities, including London. This means a healthy rental market of young professionals.

 

University city

The University of Edinburgh is one of the most prestigious academic institutions in the UK and was ranked 20th according to recent World University Rankings.

Around one-third of the student population are from overseas, and the top five nationalities are China, the US, Germany, Canada, and Italy. This highlights Edinburgh’s appeal to an international audience.

 

 

Property opportunities

Edinburgh has long been viewed as a highly desirable place to live which means housing in the city is in high demand. Edinburgh has achieved 6% growth for residential property prices between 2018 and 2019 exceeding London, making it attractive for those looking for capital growth.

But it also offers plenty of potential as a source of income with a large pool of renters. We note that a quarter of homes in Edinburgh are privately rented compared to the UK average of 16%. The vast majority of them are owned by buy-to-let investors.

On the back of a critical shortfall in housing supply, we expect Edinburgh to be one of the top-performing residential markets in the UK over the next five years.

 

Modern city

Alongside its rich history, Edinburgh also boasts lots of modern facilities, more than 50 theatres and four respected universities. Plus many parts of the city are being regenerated including St James Quarter which is undergoing a £1 billion facelift.

New Eidyn is a new development being built in the heart of St James Quarter. It will include 152 beautifully-crafted apartments with spectacular views of the city.

What’s unique about New Eidyn is that it will be located above the new St James Quarter lifestyle destination which includes four floors of shopping, dining and leisure facilities.

 

 

The apartments include access to a private residents’ garden, underground car parking along with membership rights to the neighbouring W Edinburgh hotel’s gym.

These are high-end features for a development that could become one of the standout attractions of Edinburgh’s regeneration.

The UK is an attractive place to invest for overseas property buyers and many are now venturing further afield to look at other major cities across the country. Edinburgh should be high on that list.

 

For further information, please contact JLL at +65 9671 9583 or internationalresi@ap.jll.com

 

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22 Sep 2020

Strong fundamentals and new developments make Scotland's capital a compelling alternative for shrewd investors.

High prices and competition for London property are causing more overseas buyers to explore other opportunities for UK residential investment.

One of the most promising alternative markets is Edinburgh, Scotland's cosmopolitan capital that offers strong capital growth, a diverse economy and exceptional quality of life for residents.

In recent years, the Edinburgh housing market has proven to be one of the most robust in the UK. House prices grew by 6% from 2018 to 2019, according to data from HM Land Registry, exceeding London.

Strong foundations in education, finance, innovation, technology, tourism and other sectors support a well-diversified economy, while the city's young, highly educated and affluent workforce maintains high demand for well-located Edinburgh property.

Housing demand and prices have also been kept high by a decade-long supply shortfall, although sale and rental values have remained consistent with income to keep demand sustainable.

Constrained by a coastal location and an abundance of heritage buildings in its compact city center, opportunities for new development in Edinburgh have been limited, but this is changing with a number of recent projects opening up prime central locations for commercial and residential investment.

Ranging from minor projects of several units to high-profile residential developments in prestigious locations, the most notable of these is New Eidyn.

Part of the £1 billion Edinburgh St James retail and leisure quarter that's currently transforming the New Town, this presents a rare opportunity to acquire property in a prominent position at the heart of a UK capital.

 

Business and education center

The UK's largest financial center outside London, and ranked among the top 50 worldwide by the Global Financial Centres Index, Edinburgh is also becoming increasingly known for its innovation and entrepreneurial culture, aided by local 'tech incubators' such as CivTech and CodeBase.

Startups and established technology firms occupy around one third of office space in the city and contribute significantly towards the strong housing demand.

Edinburgh's growing tech scene benefits from the presence of four esteemed universities supplying highly skilled graduates, among them the University of Edinburgh, a QS world top 20 university and leader in computer science and informatics.

With the most international students and second largest student population in the UK per capita, Edinburgh is on course to be the nation's most youthful city by 2027, offering an ideal renting demographic to landlords.

 

Most livable city

Besides its business and education credentials, Edinburgh is also renowned for its high quality of life. Frequently named the most livable, most walkable and most attractive city in the UK, among other accolades, it also boasts the most green space at 49%.

Tourism and events are major pillars of the economy year-round, particularly during the month-long Edinburgh International Festival in August when the city's population doubles and the huge demand for temporary accommodation is a boon to property owners.

For local residents, Edinburgh offers the shopping, dining and lifestyle perks expected of a major city, soon to be boosted further by the opening of Edinburgh St James.

This landmark development will include 85 designer stores and 30 cafes and restaurants over 1.7 million square feet in the heart of Edinburgh New Town, adjacent to a five-screen Everyman cinema, new W Edinburgh Hotel and shopping boutiques along Multrees Walk.

 

New Eidyn

Directly above the four commercial floors at Edinburgh St James, New Eidyn is a collection of 152 luxury homes spanning the fifth to eighth floors of the development.

Ranging from 518 square foot studios to four-bedroom lateral apartments, duplexes and penthouses over 2,500 square feet, each residence will command captivating views over the historic city center out towards the Firth of Forth.

 

For further information, please contact JLL at +65 9671 9583 or internationalresi@ap.jll.com

 

New Eidyn - Launching in Singapore on 3rd – 4th October

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29 Sep 2020

Home to the Scottish Enlightenment during the 18th Century, Edinburgh is one of the most beautiful cities in the British Isles.

 

Its architecture includes a jumble of medieval tenements along the Royal Mile, as well as neoclassical facades that characterise its New Town section. The entire city is crowned by the craggy Castle Rock where Edinburgh Castle overlooks the sprawling historic city.

Today, the city is attracting more than the usual arts festival attendees and throngs of tourists.

In the wake of uncertainty caused by Brexit and the flat growth of property prices in Central London, investors are turning to up and coming hotspots in other UK cities such as Edinburgh.

 

Location

Edinburgh has long been a centre of education, particularly in the fields of medicine, law, literature, and engineering.

The University of Edinburgh is one of the most prestigious academic institutions in the UK and was ranked 20th worldwide in the 2020 QS World University Rankings.

Close to 32% of the student population are international students, and the top five overseas nationalities represented are China, the USA, Germany, Canada, and Italy.

Singaporean students make up the 14th largest international student population.

Edinburgh is also the second-largest financial centre in the United Kingdom after London.

The cultural city is also the second most popular tourist destination in the country, attracting on average more than 1.75 million overseas visitors over the last three years.

The city has long been touted as a highly desirable place to live, especially given its low crime rate, vibrant financial services sector, and top-notch health care.

The city also prides itself in the provision of green spaces, which cover close to 28% of the urban landscape.

 

 

Rejuvenation

Meanwhile, a major rejuvenation project called Edinburgh St James is occurring in the Edinburgh’s East End.

The £850 million project is developed by Nuveen Real Estate and is set to open in phases from 2Q 2020.

Spanning 1.7 million sq ft, Edinburgh St James will comprise 850,000 sq ft of new retail space, up to 30 F&B businesses, a cinema and a 244-room W Hotel.

There will also be a residential component with 152 premium apartment units.

Multrees Walk, the gateway to Edinburgh St James, houses designer brands such as Burberry, Louis Vuitton, and Max Mara, as well as the iconic luxury British department store Harvey Nichols.

More than 80 of the world’s best retail brands from boutique to designer names will also be found at Edinburgh St James.

The landmark development is also attracting new retail stores such as New Look, Hackett, Next, Bershka, Stradivarious, and Waitrose. Fashion giant Zara is also set to open a new regional flagship store there, while Mango will open its first-ever outlet in the city.

The mixed-use development is expected to turn that side of the city into a new retail and tourist hotspot, and will likely have knock-on benefits to surrounding areas such as Princes and George Streets, the Royal Mile, and other nearby parts of the city.

 

 

Demand

The high liveability of the city also means that housing in the city is in high demand, especially given the relatively high portion of young people living in the city.

According to a research paper by Jones Lang Lasalle published in Feb 2019, a third of Edinburgh’s population is aged 15 to 34, compared to 25% across the UK.

In addition, close to 11% of the city’s population work in typically higher-earning financial and insurance sectors. Meanwhile, average household incomes are higher than the UK average, with 55% of Edinburgh households earning above £40,000 per annum, compared to 45% of households across the UK.

Students, young professionals, families, and retirees all contribute to the overall rental demand and the diverse profile of renters makes the city all the more appealing to investors.

JLL notes that a quarter of homes in Edinburgh are privately rented compared to the UK average of 16%. The vast majority of rental stock in Edinburgh is also owned by buy-to-let investors.

 

Sale Price

Last year, the average sale price of a typical two-bedroom unit in a new development in Edinburgh’s city centre was £285,000, which translates to an increase of 2.5% y-o-y.

In terms of rents so far this year, a similar unit type in a new development commands close to £1,000 per calendar month (pcm), which reflects an increase of 3.1% y-o-y.

On the back of a critical shortfall in housing supply, JLL expects Edinburgh to be one of the top-performing residential markets in the United Kingdom over the next five years.

This year, only two new schemes are expected to be completed. They are Artisan Real Estate Investors’ 244-unit New Waverley and Campus Development Management’s 32-unit King’s Quarter.

 

 

Buy to Rent

But JLL notes that there is a lack of purpose-built private rental stock in the residential development pipeline, especially given the high proportion of renters in the city.

For now, the planning pipeline only features two new purpose-built rental schemes totalling 780 units.

They are Moda/Apache’s 337-unit Springside and EDI’s 434-unit India Quay scheme. Both schemes have received planning permission but neither site has begun development yet. The lack of modern, purpose-built new developments means that discerning renters looking for high-quality rental apartments are underserved.

Thus, JLL expects the average price and the average rental growth in Edinburgh to increase by 3.1% per annum, well above the UK-wide forecast of 2.2% per annum price growth and 2.4% per annum rental growth.

 

For more information on investing in Edinburgh, please contact JLL International Residential
at +65 9671 9583 or internationalresi@ap.jll.com

 

Research: Scotland Residential Forecast Feb 2019

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14 Sep 2020