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Investing in Scotland | 1 SCOTLANDSCOTLAND Capital Capital Investment Investment PortfolioPortfolio 2 | Investing in Scotland V&A V&A Dundee, Dundee, opened opened September September 2018 2018 Investing in Scotland | 01 CONTENTS Introduction 04 Property & Infrastructure Market Overview 08 Capital Investment Success to Date 09 Our Sectoral Strengths 10 Our Seven Cities 12 Investment Opportunities 16 Support to Promote Investment 18 Capital Investment Scotland Group 20 Work with us 21 Cover – Queensferry Crossing, Firth of Forth 02 | Investing in Scotland Invest in scotland Investing in Scotland | 03 CGI of Advanced Manufacturing Innovation District Scotland (AMIDS) Renfrewshire We take a strategic approach across Government and partners to attract capital investment to large scale projects. Scotland’s public sector is aligned behind making Scotland a great place for business to invest with all our key agencies, Scotland’s cities and the UK Government’s Department for International Trade working together through the Capital Investment Scotland Group. This portfolio demonstrates the strengths of our economy and the depth and diversity of our business base. Our market is transparent with plentiful information on pricing and property ownership. Risk is further reduced by a planning system that protects the value of investments. Scotland offers a well-developed legal, advisory and professional framework, and easy access to finance, either in Edinburgh, one of Europe’s leading financial centres, or in London, the global financial capital. CGI of Queen Street, Aberdeen To ensure that this economic environment translates easily into investment, the Scottish Government has developed a highly-competitive package of support to encourage and de-risk investment. Measures include rental guarantees, business rate exemptions, innovative funding schemes, and planning reforms that all catalyse development. 04 | Investing in Scotland INTRODUCTION The international market has been investing in Scotland has a strong and attractive Scotland for many years1 and Scotland is the UK’s investment offer, and through top destination for foreign direct investment outside London for the 6th year running. The Scottish its growing and stable economy, economy has strengths in research & development, thriving cities, outstanding manufacturing, and financial services, underpinned by talent, world class universities, innovation and high levels of employee retention. leading-edge innovation, and high The Scottish public sector also works together to provide a ‘Team Scotland’ approach ensuring quality of life. a streamlined approach for investors. Scotland has a well-educated, highly skilled and adaptable workforce. The country is home to four higher education institutes ranking in the global top 2002. Investors have access to world class research and high-quality graduates from the highest concentration of universities in Europe3. 5.3mPopulation 5.3m 1. Annual E&Y Attractiveness Surveys 2. Universities Scotland, https://www.timeshighereducation.com/world-university-rankings/2019/world-ranking 3. Universities Scotland https://www.universities-scotland.ac.uk/scotlands-universities/ Investing in Scotland | 05 Average weekly wage (full time) 2 80,000km £548 Land area UNEMPLOYMENT RATE (2017) £150bnTotal on shore GDP (2017) 3.6% GDP PER CAPITA £27,854 £ c 220,000 EMPLOYED BY THE CONSTRUCTION SECTOR IN SCOTLAND CONTRIBUTING TO 9% OF UK CONSTRUCTION OUTPUT4 4. Cushman and Wakefield – Perspectives, the latest on UK Real Estate, Issue 04, 2018 06 | Investing in Scotland introduction continued IN SUMMARY INNOVATION 1. LONDON £ 2. SCOTLAND • Scotland is the most attractive region in the UK for inward investment after London. Scotland has a long-standing reputation for innovation and engineering excellence. Television, penicillin and radar were all invented in Scotland. • Scotland attracted more R&D projects than any other UK region in 2016 (including London). 50% A recent example of Scottish innovation is Pure Lifi, a world leader in the development of light based communication. • In Scotland 50 per cent of young people participated in tertiary education, whether at universities or further education colleges. TOP 10 FOR Scotland’s Innovation Centres support collaboration INVESTMENT between universities and businesses and help companies • Glasgow, Edinburgh and Aberdeen commercialise their research, with more spin-outs are all among the top ten cities in the UK from universities than anywhere else in the UK5. for attracting international investment. 5. Scottish Funding Council http://www.sfc.ac.uk/innovation/innovation-centres/innovation-centres.aspx Investing in Scotland | 07 CONNECTIVITY QUALITY OF LIFE 100+ FLIGHTS PER DAY Scotland is well connected. You can travel to and Life is culturally rich in Scotland, commutes are short, from over 35 countries directly to the rest of the schools are excellent and health care is free. world. There are over 100 flights per day between Scotland and London, while most key European cities are only two hours flight from Scotland. Scotland’s history and landscape draw millions of tourists, and the coast, lochs and mountains mean endless possibilities for outdoor activities. Connectivity between cities in Scotland is also excellent – it is now less than 45 minutes travel time between Glasgow and Edinburgh by train. On an average weekday there are more than 160 trains that connect both cities. Scotland’s cosmopolitan cities are full of life, culture and entertainment. Edinburgh rated first and most livable in Already more than 95% of Scotland’s homes and Arcadis 2018 global quality of life survey. businesses are now able to connect to fibre broadband. This figure is projected to reach 98% having access to superfast broadband6 by the end of 2018. 6. Scottish Government Reaching 100% Superfast Broadband for All, December 2017 08 | Investing in Scotland Property & Infrastructure Market Overview Scotland’s commercial property market is strong, evidenced in 2018 with high occupancy rates and rising prime rents (over £350 per sq metre for Grade A offices in Aberdeen, Edinburgh & Glasgow7) and Scotland’s rate of growth in capital investment in 2018 was 86% (the fastest rate of growth of any UK region). There are also some large developments under construction. The Edinburgh St James Complex is one of the UKs largest regeneration projects with over £850m of investment in the heart of a world heritage site, with investment from Dutch pension fund APG and TH Real Estate. Infrastructure development is supported nationally by the National Planning Framework for Scotland, which identifies nationally significant development projects to be funded through public and private sector investment. The Framework specifically recognises the importance of airports, designating Glasgow, Edinburgh, Aberdeen, Inverness and Prestwick as ‘National Developments’ as well as supporting the development of ports and freight infrastructure. OVER THE LAST DECADE: MAJOR IMPROVEMENT £20bn PROJECTS 2525 major improvements projects have been More than £20bn has been invested in transport infrastructure and services in Scotland; constructed, including the M8, M73 and M74 Motorway Improvement Project 4G Improved digital connectivity is supported as a national development and permitted development rights have been extended to support the necessary digital infrastructure. 4G coverage is expanding rapidly and the cities of Aberdeen, Edinburgh, Glasgow, Dundee and Stirling are all installing gigabit infrastructure. Furthermore, Glasgow is moving towards full fibre coverage. Investment by government and private sector in internationally competitive digital connectivity means and the newly opened Queensferry Crossing; that 98 per cent of all homes and businesses in and over £7.6bn has been invested in the Scotland will have access to broadband by 2018. Scotland Rail network Investing in Scotland | 09 Capital Investment success to date In recent years, over 50% of the commercial property Investors in Scotland find investment transactions in Scotland involved overseas capital8 with recent examples including the Capella Building in Glasgow bought for £43.5m, with investment from Asia, Atlantic Quay, Glasgow sold for £55m with investment from the Middle East and the £28.5m Quartermile 2 by UBS using Swiss funds. A stable and well Excellent global and Since 2008 Glasgow has attracted £5.3bn of respected legal system local connectivity commercial property investment, the third highest level of investment of any city in the UK outside London. From 2008-2017 Aberdeen attracted £3.15bn of £ commercial property investment, the ninth highest level of investment of any city in the UK outside London. Since 2008 Edinburgh has attracted £4.9bn of commercial property investment, the fourth highest level A highly developed Supportive of investment of any city in the UK outside London. financial system investor-friendly policies Edinburgh is ranked as the 4th city globally relative to its size for investment intensity9. This is testament to the significant collaboration across Scotland’s public, private and academic sectors to project a truly connected £ Scotland to international markets. One of Edinburgh’s highest profile office buildings Saltire Court has recently High performing higher A growing portfolio of been sold to a Saudi Arabian investor, for £71m. This is a and further education large scale investment 16,500 sq m prime office building in Edinburgh city centre institutions opportunities