The Build to Rent (BTR) sector is growing in Scotland, providing professional managed private rented accommodation funded by institutional funds.
There are now close to 17,000 homes operating or in the pipeline across the country.
Glasgow provides around half of these homes. Legal & General’s Solasta Riverside scheme at Buchanan Wharf is now fully operational. Drum have now topped out at Candlerigg’s Square in the City Centre as part of the wider £300m mixed-use City Centre regeneration. Rettie & Co. recently brokered deal between clients CCG and Casa by Moda to deliver the first scheme of single-family BTR homes in the city (Casa Vista Park).
The strong growth of pipeline in Glasgow can be attributed to a number of key factors.
- There is a young, professional, and economically active population
- There is a strong and active private rental sector (PRS)
- There is an availability of development opportunities for residential development, particularly in the City Centre, with the Council looking to encourage the re-occupation for residential use.
In Edinburgh, the delivery picture is positive and compelling. Average rents in the BTR sector in the city, across the currently operating schemes, are over £2,300pcm and around £37/sqft. The rents being achieved are among the best performing in the UK. Our own experience in the sector bears this out, with application numbers for new rental releases massively outstripping supply.
Recent highlights include:
- The scheme formerly known as the development Skyliner has now broken ground under the new name of Dockside. Having replanned for 338 units and secured £67m debt financing with NatWest, Goodstone Living and McAleer & Rushe are now developing in Leith.
- Construction of PLATFORM_ and Heimstaden Bostad AB’s scheme in Bonnington is also well underway, with a 2024 launch date. The scheme will comprise 464 homes in total, just off the Water of Leith.
- Redevelopment of the former RBS site on Dundas Street in Edinburgh’s New Town will deliver prime residential units for sale and rental as well as office space, amenity & civic space and parkland.
- Sigma Capital’s partnership with Lovell will deliver 185 single family BTR units as part of the wider development at The Crossings in South Queensferry.
Aberdeen is home to the one of the first operating BTR schemes in Scotland (Forbes Place in Dyce) and the city now has two active schemes with over 630 homes.
There are two current schemes, which despite both having planning, are at different stages in the process at Broadford Works in Rosemount and Rubislaw Quarry by Canadian developer Carttera.
Schemes have been delivered in the city despite average advertised rents have fallen from a peak of over £1,100pcm in Q4 2014 to a low of under £700pcm in 2020/21, although they have recently started rising into the mid £700spcm range over 2022/23.
Dundee has yet to see the delivery of its first BTR homes, despite schemes being proposed as far back as 2017. Challenges for BTR delivery have mainly revolved around viability, with relatively affordable rents within the city and a smaller target population.
That is not to say that BTR in Dundee is not viable. Rents have been rising within the city and, at the top end of the PRS rents, values could underpin a quality BTR offering. It will, however, be the combination of positive government support and a vision for delivery that will be required to get the first BTR units out of the ground in the city. Positively, Dundee City Council believes that BTR is a key component for reviving the City Centre.
The BTR sector has much untapped potential across Scotland, but particularly in its main cites, where there is a clear demand/supply imbalance for private rented housing that is illustrated by sharply rising rents for advertised properties as well as historical low time to let periods. The Scottish Government’s emergency legislation, which has brought in rent caps as well as eviction bans, and the prospect of a longer term set of rent controls have knocked some of the wind out of the sails of the sector. BTR is able to provide additional new housing at scale and speed. Legislating against such provision would seem foolhardy in the current climate and we are working with others in the sector to get this message across to Government. A link to Rettie & Co’s latest national review of BTR in Scotland, which discusses these points in greater detail, can be found here Build To Rent – Scottish Market Review Summer 2023 | Blog | Rettie & Co.
