A new collaboration aims to develop blockchain solutions to the data recording problems that can jeopardise complex construction projects.
Edinburgh Napier University is teaming up with newly formed Hypervine following a series of industry scandals which have highlighted the need for strong audit trails for undertaken work.
A blockchain is a growing list of records secured using cryptography and resistant to modification.
The technology can reduce the risk of problems such as documents being lost or actions not followed up.
The university’s new Blockpass Identity Lab uses cutting-edge blockchain research to drive innovation.
Hypervine, based in Glasgow, focuses on digitising construction to improve the reporting and recording of data, enabling companies to adapt to fast-changing economic, environmental and governmental policies.
Professor Bill Buchanan, the lab’s director, said: “The nature of the construction industry is that there are many stakeholders involved, and making sure that each part of the process is working as it should can be difficult.
“A blockchain solution will aim to integrate digital signing into the key parts of the process.”
Liam Bell, the lead blockchain researcher in the lab, said: “The application of blockchain into the construction industry, where strong levels of trust in the process are required, is a natural one.”
The collaboration comes after the sector was criticised following events like the Edinburgh private finance initiative schools crisis and the Grenfell Tower fire in London.
The annual spend due to construction errors is estimated to be around seven times the annual profit of the UK industry.
Paul Duddy, chief executive and founder of Hypervine, said: “Digitising infrastructure, construction and facility maintenance industries through blockchain technologies will yield significant improvements across the sector that will have wide-ranging positive economic and social economic impacts for both private and public sectors. The aim is to help eliminate the kind of problems we have seen in the UK.
“Blockchain technology means you can make the data more reliable and more traceable. It makes it a lot easier for problems to be found.
“It was developed for use in finance but can absolutely be applied to construction, it is a perfect fit.”
He says, however, that the technology is not being adopted in isolation, that something of a revolution is happening. “You have advances such as drone use, 3D printing and telematics. Together all of these will make the industry safer and more efficient.”
Hypervine and the university’s School of Computing were brought together by Interface – which works with businesses to translate their ideas into dynamic briefs for academics.
The collaboration is supported by the Scottish Funding Council’s Innovation Voucher scheme, which Interface administers. Ruth Oliver, business engagement executive at Interface, said: “Hypervine is helping construction companies build faster, safer and more cost-efficiently.
“Exploring how to incorporate secure methods of recording data in complicated supply chains and transactions is a key element of this.”
Duddy says: “We have had some industry engagement already and some companies will understand and lead the way, while others will have to play catch-up.”
City council reject 27-bed shared housing scheme at former MJB “doss house”
PUBLISHED: 16:31 08 February 2018 | UPDATED: 17:33 08 February 2018
MJB Group Beeches Hotels. Bristol House in Unthank Road. Picture: Denise Bradley
Members of Norwich City Council planning committee have rejected a plan to turn the former MJB hotel at Bristol House into a 27-bed HMO (House in Multiple Occupation).
Last September Ben James, the new owner of the former MJB hotels at Bristol House and The Lodge on Unthank Road announced he would be investing £600,000 in each property.
While under the ownership of the MJB group, both properties had been the source of numerous complaints about drug taking and prostitution.
But Mr James said that would change, as he was looking to attract a “different type” of clientele.
Plans to convert the building into a 27 bedroom home with a gym, cinema room and communal areas were brought to the city council on Thursday but was turned down on the basis it did not provide high quality amenity for residents.
“My fear is we will be replacing what was a doss house with a low quality HMO,” said Green councillor Denise Carlo.
“My fundamental issue is the number of people living there. I would rather see this building made into self contained flats.”
But Mark Phillpot, agent for the developer, Estateeducation, said they wanted to draw a line under the history of the building.
He said: “Members will be aware of the long and rather chequered history of this site. The new owner has set out to draw a clean line under the former ownership and put an end to the troubles of the past and give a positive contribution to this part of Unthank Road.”
Labour’s Karen Davis, for Town Close, spoke against the application.
“I was told the applicant did not wish to meet me face to face so I had to come here with my concerns instead,” she said.
“Residents are very concerned about noise issues and Town Close doesn’t need this type of housing. It needs affordable housing, not create a mono-culture on Unthank Road.”
Planning officer Mark Dunthorne warned members they could not let what they thought of the developer or the former owner, Tony Burlingham, “cloud their judgement”.
They agreed some form of management was needed for the property, but chose to reject the application by six votes to five rather than defer it.
Here are some the latest commercial property investment and letting deals from across Wales over the last month.
The historic Market Buildings at the entrance to Cardiff Market has been sold to London-based investor The Thackeray Estate.
Cardiff-based property advisory firm Cooke & Arkwright sold the Victorian built building on behalf of the Sellar Property Group for an undisclosed sum, having been marketed for £1.75m.
Market Buildings is a Grade II listed building over six floors.
It forms the main entrance to Cardiff Market and provides around 21,000 sq ft of mixed accommodation, including office, retail and leisure use.
Tenants include Paddy Power, Welsh Language Commissioner and Future Generations Commissioner for Wales.
There is 4,523 sq ft of vacant accommodation available.
Caryl Howell, investment surveyor at Cooke & Arkwright, said: “We are very happy to have completed on this deal. The property was built in 1886 and has been in Sellar’s ownership since 1997.
“Now under new ownership, the property is entering a new phase of its life cycle with The Thackeray Estate showing great enthusiasm to utilise the building, taking advantage of the opportunities available in the fast-moving Cardiff property market. We look forward to seeing its journey unfold.”
Major apartment scheme
A scheme for a 25-storey high private residential apartment tower in the centre of Cardiff has been revealed.
Based on the site of the existing Landore Court, in Charles Street, the project would also have retail and office space.
Early plans for the ambitious project, which would see 270 apartments built, have been developed by property development firm Garrison Barclay Estates (GBE) that would see the existing 1990s built Landore Court – a detached block of four self contained office properties – demolished.
But even though GBE has just concluded a £5m sale of the 22,000 sq ft building, it is understood that new owner in BP’s Ropemaker pension fund, are looking to take forward the tower plans.
The designs for the project have been drawn up Cardiff-based John Wotton Architects.
Landore Court is currently fully let. Tenants include expanding law firm Gordon Dadds and Harley Medical group.
However, they are on short term leases of two and a half years duration.
This could see the new owners taking forward the initial plans from GBE, subject to planning consent, from 2020 onwards.
As well as the private apartments, the scheme currently envisages 15,000 square foot of grade A office space, an element of retail space and 80 basement car spaces.
GBE acquired Landore Court last year from American-owned property investment firm Citruz.
Andrew Innes of GBE said: “Our intention was to redevelop Landore Court in 2021, but with a number of a major development projects under way , including two hotels , 800,000 sq ft of industrial space and 130,000 sq ft of office space, it’s time to exit all stock that’s no longer part of our core business.”
GBE recently secured planning consent to transform the tallest building in Newport, Chartist Tower, into a four star Mercure Hotel, as well as providing new retail and office space in the city centre.
Following the £5m Landore Court deal, GBE plans to sell a further £10m worth of its non core property portfolio in south Wales by year end.
It comes as space at GBEs latest acquisition, the £18m science park previously owned by GE Healthcare, at Coryton, Cardiff, will be brought to market later this month.
Landore Court currently generates a rental income of around £300,000 a year.
Justin Millett of JLL acted for Ropemaker on the deal , with Andrew Gibson of Cushman & Wakefield acting for GBE.
Global recruitment consultancy Hamlyn Williams has expanded its Cardiff operation by moving into larger city centre offices located in Wyndham Arcade.
The office accommodation, known as The Warehouse, has been refurbished by G Capital.
Hamlyn Williams has moved from Capital Tower to take a five year lease on the 2,557 sq ft office at a rent of £20 per sq ft.
Landlord G Capital was represented in the transaction by property consultancies Knight Frank and Savills.
Grace Shackell of Knight Frank said: “The specification and central location of The Warehouse proved a perfect fit for Hamlyn Williams, who went under offer within a few weeks of marketing getting under way.”
Gary Carver at Savills said: “The refurbishment has created an up-to date office environment whilst retaining many of the existing historic features of the building. Cardiff needs more office space like this.”
Rod Thomas, property manager of G Capital added “It is a pleasure welcoming a company such as Hamlyn Williams to the Wyndham Arcade. This completes the tenant mix of the arcade, which is now fully let.”
Eastern Business Park
Housebuilder Bellway Home has moved into new premises at Eastern Business Park in Cardiff.
It has taken a 10-year lease on 8,939 sq ft at Eastern One, one of three office buildings on the 12-acre, campus-style business park at St Mellons, owned by Robert Hitchins Ltd.
Robert Hitchins’ asset and development manager John Jones, said: “We’re delighted to add such a successful company to our list of tenants at Eastern One.
“Bellway identified its preferred office suite and we worked closely with them to deliver the refurbished suite on time. The quality of the refurbishment represents our continued investment in Cardiff and South Wales.”
The agents were Huw Thomas Property Consultancy and Cushman and Wakefield.
Robert Hitchins has recently invested more than £750,000 in an internal refurbishment of Eastern One. The end result is suites of between 5,000 and 40,000 sq ft on a single floorplate.
Tenants at Eastern Business Park include architects Powell Dobson, CafeX Ltd, E-On UK plc, Laing O’Rourke Construction Ltd, Taylor Wimpey UK Ltd and the Independent Police Complaints Commission.
Eastern Business Park’s three buildings offer a total 170,000 sq ft.
Swansea Enterprise Park
A newly refurbished property on Swansea’s Enterprise Park has attracted the British Heart Foundation (BHF) as the location for its second Furniture and Electrical store in the city.
Property advisory firm LSH acted for a London-based Trust, advising them to upgrade the 11,000 sq ft warehouse, Unit 8B on St David’s Retail Park, in order to meet occupier demand.
Post-refurbishment the LSH consultants considered interest from several big-name operators before letting it to BHF Cymru.
The property had sat empty for several years.
Jason Thorne, agency director at LSH in Swansea: “This is an excellent example of how investing through refurbishment can reap rewards for landlords. Even though this property was in a prominent position at one of the main entrances into this long-established retail park, it was not fit-for-purpose so lacked market appeal.
“There is a severe shortage of good quality accommodation in the current south west Wales market, so it makes sense for investors to focus on improving obsolete, well-located stock. Development funders should also look for opportunities in areas that will benefit from planned road infrastructure improvements.”
Thomson Heaney acted for BHF, a charity that for over 50 years has pioneered research which has transformed the lives of people living with heart and circulatory conditions.
Its new Swansea shop opened recently and is one of 170 Furniture and Electrical stores across England, Scotland and Wales, and where last year (2017) sales throughout Wales alone reached £6.7m.
The first Swansea BHF store opened on the Kingsway in the city centre in 2009.
Mamhilad Park Estate
Mamhilad Park Estate has in Pontypool has announced the latest letting in a string of recent transactions which have seen employment numbers grow to over 1,600 jobs across the estate in the last three years.
The latest deal sees the Alzheimer’s Society bringing all its offices in south east Wales under a new regional headquarters.
The open plan offices, totalling 3,400 sq ft, were officially opened by AM for Torfaen Lynne Neagle.
Kerry Phelps, Alzheimer’s Society’s operations manager for Gwent, said: “This new, central facility is ideal for us as it offers scope for expansion, particularly in relation to the implementation and development of Alzheimer’s Society’s 2017-22 strategy, The New Deal on Dementia.
“We had five offices – one in each local authority area (Monmouthshire, Blaenau Gwent, Caerphilly, Torfaen and Newport) This is a consolidation of all five, bringing the whole team together from across the locality.
The new office space was refurbished, by Johnsey Estates, on budget and on time.
James Crawford, chief eecutive of Johnsey Estates, said: “I am very pleased with the way that this refurbishment has gone, this could be one of our best ones yet.
“The in-house Mamhilad Park Estate team did a marvellous job in creating the new space and managed to deliver it on time and to specification by working as an efficient team during unsocial hours to reduce the impact of the work on existing occupiers in the building.
“I am also glad that the Alzheimer’s Society are so thrilled with their new office space and all the facilities included within it and the rest of the estate.”
There’s nothing fancy or different about creating a tenancy with a HMO (Houses in multiple occupation) tenant – the legal agreement between you and your tenants should be an Assured Shorthold Tenancy (AST), just like if you were letting a property to a single family (i.e. a single let).
AST’s are the most common form of arrangement between private residential landlords and tenants – including HMO tenants – in the UK.
Introduction to HMO Shorthold Tenancy Agreements
I’ve already discussed Assured Shorthold Tenancy Agreements in depth, and everything in there – including the best practices, rules and legislations governed by the relevant Housing Act(s) – will apply to HMO tenancy agreements, including:
6 or 12 month tenancy terms are most common (I prefer offering 6 months, personally)
Any deposits taken must be protected into a tenancy deposit scheme
The tenancy agreement should stipulate who is responsible for what bills e.g. electricity, gas, council tax etc.
However, while I’ve been through much of the details already, there are a few specific points I want to highlight and cover in regards to creating an ASTs for HMO’s, which typically aren’t as relevant for regular single let situations:
You probably won’t have an AST if…
you charge more than £100,000 a year for rent. While this will be unlikely for most landlords, I wouldn’t be surprised if some HMOs exceed the threshold.
To check what kind of tenancy you have (if you’re unsure), you can use this nifty little tool by Shelter.
HMO tenants and utility bills
As mentioned, the tenancy agreement should stipulate who is responsible for what bills e.g. electricity, gas, council tax etc. Generally speaking, in shared accommodation situations, the landlord takes care of all the bills – especially if each room has a separate AST (more details in the section below) – and takes that into consideration when setting the rent. From my experience, most HMO tenants and landlords prefer that. It’s, of course, the most simple way of handling bills.
It is possible to assign one ‘responsible’ tenant to be in charge of all the bills, which means he/she will have to collect the money from the other tenants and then make payment. But this option is less desirable for a couple of reasons:
if the assigned tenant decides to leave, someone else will need to be assigned, which isn’t always an easy process
it can be the root cause of tension between tenants:
If a tenant refuses to pay, or frequently pays late
It’s difficult to measure exactly how much of the utilities is used by each tenant, so if one tenant feels they use less electricity, for example, they may begrudge paying an equal share once having seen the bill total.
Landlords often charge a little extra for covering the bills, so they make more money from it.
HMO tenancies can be Joint or Sole/Separate
There are generally two common ways of implementing tenancy agreements for an HMO property: by using individual contracts for each tenant, or using a single ‘joint and severally liable’ agreement.
The tenancy agreement’s terms and conditions should state whether the tenancy is a Sole or Joint agreement:
Joint tenancies: this is a common arrangement for student properties, or a HMO comprised of friends moving in together, and work best if the tenants know one another and are likely to move in and leave at the same time.
The tenants are jointly liable for both the rent and the care of the property; responsibilities are shared between tenants (like a single let arrangement, where the lead tenants, as stipulated in the tenancy agreement, are responsible). For example, if one tenant doesn’t pay rent, then the other tenants will be required to cover the shortfall. Also, usually the remaining tenants are responsible for finding a tenant(s) if a room becomes available.
By nature, a joint tenancy requires less administration, as there is one overall agreement with one single rent payable (and one deposit to protect, should you decide to take a deposit).
All tenants names should be on one tenancy agreement in this case.
Sole/Separate tenancies: HMOs comprised of adults, who usually don’t know one another and don’t want to assume responsibility for other tenants, are usually issued separate (Sole) AST’s for each room.
Each tenant is responsible for them self i.e. they pay their own rent, and the behaviour of other tenants does not affect their tenancy. For example, if one tenant does not pay rent, or has fallen into arrears, the remaining tenants are not required to cover the shortfall.
This requires more admin work as each room should have their own individual tenancy agreement, and each and every deposit should be individually protected when one is taken.
As briefly mentioned above – in the utility bills sections – if there is a separate AST per room, it usually means the landlord will be liable for council tax and utility bills (it just makes more sense that way, practically speaking).
HMO Tenancy Agreement Contracts/Forms
There’s certainly no short supply of tenancy agreement contracts around the web (a swift Google’ing session will attest to that), many available for free download, which I understand can be an extremely compelling proposition.
My first word of warning is to use a reliable outlet, and use a contract that is specifically for HMO’s that meets the demands of your setup. While, in almost all cases, HMO tenants are given an AST – most AST contracts available from stationers and online are intended for Single let situations. Do NOT use those for HMOs as they won’t be suitable.
My second word of warning is not to butcher existing tenancy agreements by adding and modifying clauses to meet your specific set of circumstances. It’s something many landlords have done only to regret shortly after. You could end up in a legal bind if any of the additional clauses were to be challenged and they weren’t drafted properly, or aren’t legally enforceable in the first place.
The best thing to do is contact a specialist landlord law solicitor, and get them to draft a contract specifically for your HMO. Yup, it may cost a couple of hundred quid, but it’s definitely a sound investment if you’re serious about doing HMOs right.
Landlords who own lots of properties may be able to use their personal incomes, such as their salary, investment income or pension, to get a mortgage, as new strict rules on buy-to-let borrowing kick in.
This month, the Bank of England’s Prudential Regulation Authority (PRA) began to enforce stricter stress testing for landlords with four or more mortgaged buy-to-let properties.
So far, lenders have reacted in a variety of ways – with some bringing in new underwriting systems or amending affordability criteria, and others dropping out of the market entirely.
A handful are also now offering ‘top slicing’ deals, which allow landlords with low rental yields to make up their shortfall through other income.
Here, we explain how affordability testing works and take a look at how banks are adopting the new regulations.
Whether you’re a first time landlord or an experienced investor, you can get advice on finding the right buy-to-let mortgage by calling Which? Mortgage Advisers on 0808 252 7987.
Interest cover ratios and affordability
Lenders must now take every property in a landlord’s portfolio into consideration when they apply to take on a new mortgage, rather than simply assessing their overall balance sheet.
When landlords apply for additional borrowing, the monthly rental income on each of their properties must cover at least 125% of their mortgage payments, tested at an interest rate of 5.5%.
This calculation is known as the ‘interest cover ratio’. Some lenders have chosen to test affordability at ratios up to 145%, meaning heavily mortgaged landlords or those with low rental yields could struggle to obtain a loan.
Top slicing helps low-yield landlords
With this in mind, some banks are using a system known as ‘top slicing’ in their calculations, with Mansfield Building Society the latest to launch this type of deal.
Top slicing takes a landlord’s personal income, such as their salary or pension income, into consideration when assessing their affordability, rather than just looking at the profitability of their property portfolio.
Top slicing is good news for landlords buying higher value properties which might have lower rental yields, as it allows them to use external personal income to bridge any shortfall.
David Blake of Which? Mortgage Advisers says: ‘As the buy-to-let market continues to evolve, more lenders are adopting a holistic approach to their lending.’
‘This means they are not purely concerned with the rent a property will achieve, but also the client’s overall income and indebtedness’.
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Are top slicing deals widely available?
So far, only a handful of lenders have adopted top slicing in their affordability calculations.
It remains to be seen whether more will follow suit in the next few months as an increasing number of landlords seek to take out extra borrowing.
How have lenders reacted to the PRA changes?
While the majority of lenders are stress testing affordability at an interest rate of 5-5.5%, their approach to interest cover ratios differs significantly.
The table below shows the minimum interest cover ratios allowed by each lender.
Will landlords face a more limited choice?
While it’s too early to say if the new regulations will have a significant effect on the number of deals available, some lenders have already decided to steer clear of the portfolio market.
Each of the lenders in the table below have confirmed they will only accept loan applications from landlords with three or fewer properties.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.
Kespry, the leading drone-based aerial intelligence solution provider, today announced new high-resolution thermal inspection capabilities for commercial property and industrial facilities. Thermal building inspection is critical for organizations as they look to reduce investment risk in the $750 billion combined commercial real estate, insurance, and management industry. Until today, property managers, owners, and insurers were forced to rely on expensive and inaccurate manual inspections or low-resolution, first-generation drones to determine the health of a roof. By providing a fully-autonomous, simple-to-use, and high-resolution drone inspection solution, Kespry is reducing the cost of inspections for large-scale commercial buildings and delivering more accurate damage assessment.
For the commercial property industry, drone roof inspections including thermal imaging solve two critical problems. First, they identify previously-unseen damage to roofs, mechanical elements, piping, and other infrastructure unapparent in traditionally-infrequent manual inspections. This enables proactive and preventative maintenance, and uncovers minor issues before they can turn into highly-costly, impactful problems. Secondly, they enable fast and safe inspections to support insurance underwriting and risk mitigation during property ownership transactions.
“Accuracy really matters when billions of dollars of property and facilities are at risk,” said George Mathew, CEO of Kespry. “Manual inspections and first-generation drone flights are slow and inaccurate ways of attempting to understand the state of a roof and the risk that issues may have on organizations’ productivity. These earlier approaches leave surveyors, risk assessors, and roof inspectors guessing at the specific location of leaks blocked drains, or damage to building infrastructure, all of which can have serious impacts on assets inside. The new Kespry solution for commercial roof inspection solves these problems.”
Kespry’s thermal inspection solution is based on radiometric temperature analysis, providing actionable data to people inspecting roofs. Radiometric analysis means that a specific temperature is displayed for a specific point on a roof. In contrast, non-radiometric thermal drone data simply shows general temperature differences and changes in an area, making it hard to determine whether there is a specific point of damage or concern.
Additionally, Kespry uniquely creates thermal inspection views that combines pixel-level thermal data with high-resolution imagery. This enables users to granularly determine the specific location of heat damage rather than rely on the grainy, poorly-defined visual cues of earlier drone-based solutions. With Kespry, more accurate damage assessments can be conducted, reducing the need for follow-up manual inspections once a thermal anomaly is identified.
The Kespry commercial roof solution also incorporates accurate roof dimensional analysis. With this feature, users can get the dimensional data they need to complete an inspection report or pinpoint areas of concern faster and at lower costs.
“For too long, commercial property firms have relied on randomly-conducted, dangerous manual roof inspections to protect billions of dollars of property,” said Mathew. “We know commercial property professionals must juggle multiple responsibilities. By providing actionable, radiometric-thermal data integrated with high-resolution visual data, and delivering roof dimension data, Kespry’s commercial roof inspection solution gives owners and insurers less to worry about, while saving them millions of dollars in repair and lost productivity costs.”
To learn more, visit: https://www.kespry.com/commercial-property
A rogue landlord has been handed a £36,000 fine after pleading guilty operating an unlicensed HMO in Northampton.
Abdul Mukit, from Milton Keynes, admitted failure to apply for a licence to operate the property – in Whitworth Road – as a house in multiple occupation (HMO).
When Northampton Borough Council’s housing enforcement team visited the property, they found a total of 77 breaches, including electrical safety issues, obstructed fire exits and poorly maintained communal areas.
Mr Mukit had previously been served with an improvement notice, but he failed to comply with it. In mitigation, he said he did not have enough money to bring the property up to standard.
The court heard that he received income from three separate properties, including one in London.
The defendant also said he intended to rent his Whitworth Road property out to families in future, rather than operate it as an HMO.
Councillor Stephen Hibbert, Northampton Borough Council’s Cabinet member for housing and wellbeing, said: “The level of fines reflect how seriously magistrates considered these breaches to be.
“Most landlords in Northampton are excellent, keeping their properties to a good standard and ensuring that, if their properties require an HMO licence, they are licensed on time.
“We will continue to take a hard line with criminal, rogue and irresponsible landlords who think it is okay to put their tenants’ health and safety at risk.”
For each of the 12 charges, Mr Mukit was fined between £2,000 and £4,000. In addition to the £36,000 he must pay in fines, Mr Mukit was also ordered to pay the Borough Council’s costs of £2,850.22 and a victim surcharge of £170.
Intermediaries can use the online tool to swiftly calculate LTV, annual rental yield and the maximum gross loan amount in one single place. The calculator caters for both individual and limited company applications.
There’s no denying that the Scottish hotel sector is going through a period of significant growth. Tourism is booming in many parts of Scotland and Edinburgh is certainly benefiting from the upsurge in visitors, most visible this month for the festivals.
Despite concerns over Brexit, UK tourism is set for record highs this year after a strong performance in 2017.
And, along with increasing visitor numbers staying in UK hotels, there has been a surge in investment in the sector from both domestic and overseas funds.
But according to a recent report by GlobalData, Scottish destinations are faring particularly well.
In early April, First Minister Nicola Sturgeon revealed during a visit to Beijing that the number of Chinese visitors flocking to Scotland had soared by almost 200 per cent in a decade, and with the recently announced direct flights to China from Edinburgh, links with the country are set to strengthen even further.
A report this summer from Savills highlighted that investment activity in the Scottish hotels market in the first quarter of this year totalled £105.85 million – a 90.3 per cent increase year-on-year – but it also revealed that much of the demand was driven by overseas investors.
It is Edinburgh that is increasingly on investors’ wishlists. Not only is its tourist industry boosting the economy and supporting thousands of jobs, its year-round visitor numbers are attracting notable interest from large hotel and serviced apartment operators.
The heightened appetite for space in Edinburgh doesn’t just stop at hotels, though; the story remains the same for retail, leisure and office accommodation.
The number of overseas investors and tourists turning their attention to Edinburgh has resulted in the city responding.
Keen to make prominent returns, hotel room rates have increased, with a recent PwC survey finding that prices in Edinburgh’s are growing at three times the speed of the UK’s, and revenue per available room is significantly ahead of the national average.
A recent Edinburgh transaction has also highlighted the appetite among investors to be part of the city’s hotel scene. It was announced this month that the Grade A listed Buchan House on St Andrew Square would be turned into the city’s second Malmaison.
The story remains as sweet at a UK level. A 37 per cent rise in new-build hotels is contributing to a significant boost in the sector, according to analysis by Knight Frank.
The same research found that, of the UK cities presenting the best prospects for hotel investment and development, Inverness, Brighton, Edinburgh, Cardiff and Liverpool were the UK’s top five most attractive cities.
It’s also interesting to look at the areas in UK hotel investment that are experiencing the most growth.
Knight Frank’s report discovered that it’s the budget hotel sector that continues to dominate the market, representing 69 per cent of all new-build hotel stock and 65 per cent of all hotel extensions, with around 8,300 new branded budget hotel rooms planned to open this year.
Whatever the budget, tourism in Edinburgh certainly shows no signs of slowing, but investors will need to be quick off the mark to secure prime space. It is encouraging to see the spotlight fixed firmly on the city and that Edinburgh, and all it has to offer, is recognised and sought-after by investors from around the globe.
Addi Spiers is a partner at international law firm Addleshaw Goddard