City investment

Glasgow tax relief zone draws £2bn in project bids

The Glasgow region is already home to 500 businesses in the target sectors

Glasgow is poised for a £2 billion windfall from 41 projects seeking to benefit from its new tax-beneficial investment zone.

The level of interest has exceeded expectations and the bids will now be reviewed and assessed over the coming weeks for consideration and approval by the UK and Scottish Governments. 

Glasgow City Region was announced in June last year as one of two zones in Scotland to gain investment, tax reliefs and other incentives over ten years to support a package of local projects to boost the innovation economy.   

Eligible businesses had to be operating in three key sectors: Life Sciences; Advanced Manufacturing and Precision Engineering; Digital and Enabling Technologies.

Analysis by the Region’s Intelligence Hub confirmed there were around 500 businesses in these sectors across the City Region’s eight council areas.

The 41 project applications received indicated a total match funding / private sector investment of over £1 billion, with bids provided across all three of the priority sectors. 

Project bidders have to provide at least 60% of the project funding which is matched by 40% of public funding in capital or revenue investment or tax incentives.

Chair of the Glasgow City Region Cabinet and leader of Glasgow City Council, Susan Aitken said: “It’s increasingly clear that Glasgow City Region is now internationally recognised as a centre of science, technology and innovation and the new Investment Zone is an enormous opportunity for more local businesses to be part of that.

“Ambitious projects will be able to benefit from investment, tax reliefs and other incentives, further boosting our Regional economy and creating quality jobs and training opportunities for our citizens.

“With nearly £2 billion worth of project funding bids submitted for the Investment Zone, the level of interest goes far beyond our initial expectations.

“It tells us businesses are ready to seize these emerging opportunities. But also, that these dynamic and growing sectors recognise something significant and exciting is happening right here in metropolitan Glasgow and they’re determined to be part of that.” 

Glasgow city centre backed by investors

Research by property advisory firm, Lismore Real Estate Advisors has shown that 89% of investors expect to see opportunities in the Glasgow city centre market increase over the next year, amid ongoing concerns over rent controls and other delays caused by the government’s housing bill.

Property companies are the most bullish, with over 90% forecasting a year of opportunity, while funds are more cautious at 40%.

Glasgow’s attractiveness is due to its favourable yield gap compared to other key regional cities and robust fundamentals across various sectors, including an under supply of purpose built student accommodation (PBSA), a strong prime retail market and in the office sector, and a low availability of Grade A space.

student accommodation St Vincent Street
Student accommodation planned for St Vincent Street

Challenges include rent control legislation “hindering Glasgow City Council’s ambitions to revitalise its urban core and bring residents back to its heart”.

Positively, there is an expectation that the Glasgow City Region deal will deliver £1.1bn in public sector investment for major infrastructure and regeneration projects over the coming years.

Stuart Orr, Senior Development Manager of Land Securities, said: “As regeneration efforts continue, areas like Tradeston, Lancefield Quay and Cowcaddens emerge as hot spots for revitalisation, driven by favourable land values and proximity to transport hubs, promising a vibrant future for the city’s urban landscape.”

Lismore director Simon Cusiter, added: “Glasgow’s city centre population growth hinges on rent control policy, but uncertainty due to the Housing Bill, delays investment and has stalled development for several years.

“Short-term impacts hinder growth, but the medium-term potential is significant. It is more crucial than ever that public and private sectors are properly aligned in order to stimulate the development and regeneration the city deserves.”

New Glasgow tenants

Regional REIT has signed two new tenants at Lightyear, an office it owns close to Glasgow Airport.

Heathrow Airport has taken 15,121 sq ft on a 15-year lease, while Rolls-Royce has leased 15,116 sq ft for 10 years. 

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