UNCERTAINTY arising from the independence referendum “froze” corporate investment in the Capital for 18 months, according to new analysis.
The report by economic experts at the city council reveals there were no major office deals for around a year-and-a-half but says this may now “pick up” following September’s historic vote.
It cites the arrival of the UK Green Investment Bank and software company Avaloq’s decision to create an Edinburgh base with 500 jobs as evidence of the Capital’s pulling power.
The Edinburgh market received a boost on Saturday when Standard Life Investments confirmed it had signed a lease to occupy the entire office space within the new £75 million St Andrew Square development - but the report notes there were no announcements of similar importance in the months leading up to the referendum.
Coalition members today acknowledged the vote may have delayed projects which could have brought employment and revenue as the city recovers from the credit crunch.
A well-placed source said: “On that basis the report speaks for itself – they’ve put that line in and I think the fact it was uncontested shows that all parties on the council recognise this. Now we’re beyond that, hopefully it will be a return to normal service.”
It is understood a number of companies and trade bodies have indicated members were “holding back” on investment decisions until the referendum outcome.
“Now that the settled will of the Scottish people is known, Edinburgh should be able to expect a steady stream of investment,” said the source.
The Evening News has also been told there is evidence to suggest work on 12 “priority” sites – including a £100 million revamp around West Register Street – was slowed down by uncertainty related to the referendum.
The source added: “That line in the report shows that there has been an effect [from the referendum] – it’s had a delaying effect.”
However, the claims have been challenged by property experts.
Dr John Boyle, director of research and strategy at Rettie and Co, said: “The general economic outlook is far more important than any legislative issue. The UK economy was hammered by the credit crunch – that’s what seized up investment in lots of markets.”
Directors at GVA James Barr have also released the results of research showing Edinburgh could be in line for a period of heightened lease activity.
Associate Peter Fraser said: “While it is still too early to say exactly what effect enhanced devolved powers will have on Edinburgh, we believe that businesses now have the necessary stability and confidence to thrive.”
Councillor Frank Ross, the city’s economy leader, said: “The Capital remains the place to do business in Scotland and the city remains a very important global hub for the financial sector. We just had the news of Standard Life’s major deal to pre-let the entire office space in the new St Andrew Square development and we also recently celebrated an award from fDi [Foriegn Direct Investment], further proof of Edinburgh’s status as a fantastic business city.”