By Dominic Ryan
Glasgow is famous for its fizzing energy, work ethic and pioneering skills – all of which make it a highly desirable destination for overseas inward investment
Amid the world-renowned beauty of Scotland’s wild, natural landscape, Scotland’s towns and cities sit steadfast, like immense stepping stones of civilisation.
Landmarks not only for their historic architecture and cultural heritage, they are also modern drivers of economic prosperity.
When taken together, they make up the very fabric of the nation: a rich tartan that incorporates the colours not only of many clans and cultures but myriad industries, businesses and enterprises.
Of all these cities, however, Glasgow stands out as an unstoppable dynamo, a conurbation whose energy and levels of productivity attract new business and investment from all over the world.
As its citizens will eagerly tell you, Scotland’s largest city is built as much from the strong work ethic and sheer willpower of its people, as the sandstone, concrete and steel that forms its distinctive skyline along the river Clyde.
It’s this same river that inspired the talents of those who built ships which, to this day, are benchmarks in engineering and construction.
And it was the Clyde that acted as a main artery for trade in food, drink and tobacco that resulted in a surge in mass production and the growth of retail outlets.
Today Glasgow looks back with immense pride on a history built of shipbuilding, textile manufacturing, heavy engineering and international trade.
However, it looks forward too. It is continually evolving – pioneering technologies and creating fresh business sectors, as well as embracing new investment opportunities.
In fact, Glasgow had the fastest growing economy in the UK in 2013-14.
It is an economic powerhouse that managed to generate £19.3 billion Gross Value Added (GVA) in 2014 – the largest of any Scottish city.
It also boasted the highest percentage increase and the highest monetary increase in GVA from 2013 to 2014 of all the UK core cities.
With the third highest level of GVA among the UK’s core cities in 2014, it was snapping at the heels of Leeds (£20.1 billion) and Birmingham (£23.2 billion).
Such figures are laudable and impressive but true success in business, as with most aspects of Glasgow, such as its art, literature and music, depends upon its people.
It’s a fact recognised by Anne Murray, who heads up the Invest Glasgow team. “It seems clichéd to say this but Glasgow’s special ingredient is its people,” she says.
“There’s an authenticity about the city you don’t come across very often in this day and age and the friendliness is real, it’s not just a branding gimmick.
“People really do make Glasgow a special place and one that offers a warm welcome to visitors, businesses and investors.” This is borne out by the fact Glasgow was voted the World’s Friendliest City by Rough Guides in 2014 and the recently-published fDi Magazine named it runner-up in the Large European City for Business Friendliness.
“People are smart here too,” Murray points out, “with five higher education institutions and three ‘super colleges’ producing a pipeline of graduates with qualifications that are fully aligned to our priority sectors.
“This means there’s a really well qualified labour pool of 400,000 within easy access of the city, offering a wide range of class-beating skills particularly in engineering, IT, and financial and business services.”
It’s obvious Murray has Glasgow very much at heart. For the past 20 years she has worked in economic development, focusing on the city’s economic strategy and key initiatives and policy areas, such as the International Financial Services District (IFSD).
With the creation of the “in-Glasgow investment team”, she became Inward Investment Manager in 2012.
Tasked with the ultimate goal of attracting new investment to the city, she believes perceptions of Glasgow have changed – and for the better. This growing reputation of Glasgow as an attractive, vibrant and outward-looking hub – one that is particularly business-friendly – is founded on some unique selling points.
These include an excellent infrastructure; since 2011 around £10.5 billion has been invested across all sectors.
Glasgow is also peculiarly well connected. Glasgow Airport, the UK and Scottish airport of year, is only 15 minutes by car from the city centre and offers 358 one-hour flights to London a week and 200 flights daily world-wide.
Once in the city, business visitors can stay connected, thanks to 15 kilometres of new fibre currently being laid to add to the already impressive high-speed, city-wide internet coverage.
With such support, it should be no surprise Glasgow is home to some of the world’s centres of excellence in IT.
Above all, Glasgow offers a highly competitive investment prospect. Labour costs can be up to 12% lower than Edinburgh and 33% lower than London, with property costs being up to 4% lower than Manchester, 5% lower than Edinburgh and 75% lower than London.
All of this, of course, makes Glasgow a top proposition for overseas investors.
Murray points out: “Glasgow has enjoyed high levels of investment from overseas. Key oversea markets for Glasgow are Germany, the US and the Middle East, all attracted by the still healthy yield from investment.
“Currently prime office yield sits at 5.5%, prime retail yield are around 4.5%.”
Murray believes this shows investors recognise the enhanced investment returns Glasgow offers compared to other European regions.
She adds that, despite wider uncertainties (Brexit springs to mind), it continues to offer a stable and secure financial and political environment.
“Unlike other UK competitors where overheating is driving up costs,” she notes, “Glasgow still offers investors excellent value for money and a good return on investment.”
Thanks to these factors – and the efforts of Scottish Development International, Invest Glasgow and city partners – Glasgow has already enjoyed significant levels of Foreign Direct Investment (FDI).
The city is now home to a Who’s Who of international players, offering excellent career and employment opportunities to the local workforce. These include JP Morgan, Morgan Stanley (two of the earliest large FDI successes now each employing in excess of 1,200 in Glasgow), Lockheed Martin Information Systems, Spire Global, BNP Paribas Barclays Wealth, to name just a few.
Murray continues: “I would envisage, and our strategy aims to ensure, that, despite the incredible levels of competition out there, Glasgow will not only see existing businesses grow, but will also continue to attract new overseas business.
“I would hope some of the success enjoyed, particularly by the financial and business services sector, can be replicated in our emerging sectors, such as life sciences, which has world class assets in its infrastructure (the new Queen Elizabeth University Hospital Campus, for example), its specialisms including stratified (personalised medicine) and med-tech, and its human talent.”
The message that Glasgow really does mean business is already being shared across the globe.
Through major international events such as MIPIM (France) and Expo Real (Germany), Glasgow’s offer is being taken directly to the international property community and communicated to world audiences.
Murray says: “Since 2013 when we attended MIPIM for the first time on a very small scale, with only two people on a small stand, we are now seeing this approach paying off with a number of developments about to get underway directly attributable to attendance at these events.”
If Murray and her team are doing their bit to spread the word, back home Glasgow’s assets are backed up by a raft of facts and figures.
Property agents CBRE outlines in its report, Core Cities, Core Strengths (January, 2016), that Glasgow has been ranked the top Scottish city and third highest in the UK outside of London in attracting commercial property investment over the past decade (£5.27 billion).
Indeed, Glasgow ranks only behind Manchester at £8.23 billion and Birmingham at £6.56 billion in the 12 UK cities analysed in the report, ahead of Edinburgh, which is ranked fourth on the list at £4.88 billion.
Last year saw a record amount – almost £400 million – invested in the Glasgow office market and it continues to offer a considerable number of development opportunities.
In addition to priority sites at City Science and Collegelands, the International Financial Services District (IFSD) and Candleriggs offer further opportunities for investment.
On the residential front, in response to the city’s growing population and to support the city’s thriving economy and inward investment offer, in 2015, Glasgow City Council launched a new housing strategy, People Make Glasgow Home.
This is committed to building 25,000 new homes in the next 10 years.
Key areas of this strategy include land release for the development of affordable homes; helping first-time buyers to access mortgages; turning empty shops into housing; releasing 20 sites for development by housing associations in the first year of the strategy; publishing a statement on student accommodation in Glasgow and developing sites for self and custom-build houses.
In the next 10 years Glasgow’s infrastructure will also receive a major boost from the injection of £1.13 billion of City Deal funding.
Murray is keen to add that Invest Glasgow is always on hand to offer whatever support it can to make inward investment happen.
That could include access to the Glasgow Guarantee, which provides up to 50% in wage subsidies for under-20s (apprentices) and over-20s (graduates, over-50s and veterans), support in finding soft landing space for advance project teams and introductions to key contacts and city officials.
“We are open to all enquiries!” emphasises Murray.
Fast facts: Glasgow as investment magnet
Glasgow attracts more than its fair share of prestigious events. Major gatherings such as the Commonwealth Games in 2014 perfectly captured the spirit of the city in the enthusiasm and warmth of the citizens – and also its beauty (even in the rain) with its greenery, gorgeous architecture and compact city grid.
A lasting legacy of the Commonwealth Games in 2014 is the acclaimed event infrastructure that has established Glasgow as a global entertainment hotspot.
The SSE Hydro arena has been recognised as one of the most successful venues in the world by taking top spot on the Billboard venue charts and third place in the Pollstar Top 100 global arenas.
Glasgow is one of the best value for money cities for office rentals, labour and property costs. As home to more than half a million square metres of retail floor space and 3000 business units, it generated a total retail turnover of £8,496 million (March 2015) – that’s 13.6% of Scottish total. A developer-friendly, fast-track planning approach can see major planning applications approved within seven weeks of submission following robust, pre-application discussions.
Glasgow hosts 130 music events every week, which generate £75 million for the city’s economy every year. It is a 30-minute drive from some of the world’s most stunning countryside along Scotland’s west coast and north to Loch Lomond and the Highlands.
It is the UK’s number two retail centre after the West End of London, attracting 90 million shoppers every year.