GLASGOW'S PERFORMANCE TRACK RECORD
Morgan Stanley's Technology Hub on Waterloo Street
FDI
Glasgow has a strong track record for attracting FDI dating back to the creation of the International Financial Services District in the early 2000s which, through a strong public/private partnership, brought early successes in the financial and business services sector.
By creating the best-in-class infrastructure, Glasgow was able to attract overseas investment from the likes of JP Morgan, Morgan Stanley, BNP Paribas and Barclays. As well as bringing new jobs, these large corporates have also created opportunities for, and benefits to, the local supply chains both at city and city region level and each of these global businesses, having started small, have expanded significantly over the ensuing years, with combined employment of almost 10,000. These early wins created a blueprint for the city’s approach to inward investment.
FDI into Glasgow January 2013 to June 2023
Source: fDi Intelligence from the Financial Times Ltd.
Number of FDI Projects
Total number of jobs
CapEx (m)
In 2023, financial and business services is only one of the areas of inward investment strength and success. Glasgow and the city region are now recognised centres of excellence in life sciences and precision medicine (focused on activities within the Glasgow Riverside Innovation District and the QEUH), advanced manufacturing (AMIDS), digital technology and space and satellite technology (Glasgow City Innovation District), affording us the potential to attract even greater levels of investment and create many more high value jobs.
This year’s EY Annual Attractiveness Survey which reports on the UK’s overall performance in FDI with separate regional reports, places Glasgow 4th in the top 20 cities, maintaining our position for the second year in a row with 20 FDI projects, although dropping from last year’s 23 projects. Manchester tops the ranking with 45, Edinburgh second with 38 and Birmingham is third with 28 projects. Encouragingly, another important finding of the report indicates that 19.2% of companies planning to invest in the UK this year specify Scotland with Glasgow and Edinburgh the key target cities giving Glasgow every encouragement to maintain and improve on our efforts to bring investment to the city.
As competition for mobile investment grows ever more intense, and, endeavouring to stay ahead of the curve, Invest Glasgow has identified a number of industry products which enable us to track investment signals and benchmark key aspects of our offer against other cities and regions. We combine the information gleaned from these tools with leads generated via, eg. Linked In Sales Navigator and Zoom Prospector “Lead Feeder” to home in on the hottest company leads and target the decision-makers.
Our investment successes are not only testament to the quality and strength of Glasgow and the city region’s offer but to the dedication and joint efforts of Team Glasgow, alongside our strategic partners in inward investment, to pursue new opportunities which align with our city, region and national objectives.
Invest Glasgow will continue to proactively seek out new FDI opportunities that align with our objectives and enable us to better meet our three grand challenges of enhancing productivity, tackling climate emergency and promoting social inclusion.
HFD Group's 177 Bothwell Street
Capital investment
There has been over £17bn capital investment into the city since 2011 across all real estate sectors. City Deal enabling works are developing sites and upgrading key infrastructure to support further investment into Glasgow and the wider city region.
From a property perspective, professional and business services firms have a major presence, as do the back office and tech staff of major financial institutions such as JP Morgan and Barclays according to Jones Lang LaSalle (JLL). The Glasgow investment market is dominated by foreign buyers attracted by relatively high yields with prime rents sitting at £36 per square foot, and year on year rental growth of 1.4% (JLL). The flight to quality is a key driver in the commercial office market with demand for well-placed, high-quality assets such as 177 Bothwell Street, sold to Spanish investment firm Pontegadea for £215 million, as a prime example. This is the largest office investment transaction ever seen in Glasgow. As a result, total volumes for the year (2022) exceeded 2021 activity (JLL). ESG features high on the list of credentials and there is also shift to more collaboration spaces post-pandemic with offices requiring a greater level of flexibility.
A notable investment in this category was the purchase of Met Tower by Bruntwood Sci-Tech who have invested a total of £60m as part of a joint venture with Legal & General. Bruntwood Sci-Tech manages a number of innovation districts across the UK making this a very exciting development for Glasgow, not only creating much-needed workspace but also offering networking and wrap-around services to support the growing tech ecosystem. Indeed, within the next 2 years, Glasgow should see a surge in the provision of new flexible workspace with the redeveloped Tontine building led by City Property and Stelmain, and potentially new flexible workspace in a redeveloped Debenhams store, all of which fall within the boundary of Glasgow City Innovation District.
Investor and developer interest in the city’s residential market runs high with Build to Rent (BTR), purpose-built student accommodation (PBSA) and co-living leading the charge. However, industrial space to support our manufacturing sector still lags behind other areas. Vacancy levels are historically low, according to Ryden, with the construction pipeline constrained due to the rising cost of materials, yet demand remains high. This is leading to an overall lack of supply in, e.g., lab space for rent, (basic to high-spec) where, according to local industry contacts, a shortage threatens to stall growth in our life-sciences and bio-tech ecosystems, as well as manufacturing space. This is a challenge facing the UK as a whole, including the Golden Triangle of Cambridge, Oxford and London, but could be turned into an opportunity for Glasgow and the city and region if we increase supply to be more competitive.
Invest Glasgow will continue to promote Glasgow for future development and investment is those areas with known demand and which meet Glasgow’s strategic requirements such as:
- Residential investment to help us achieve our strategic housing objectives (creating enough new homes to accommodate a total city centre population of 40,000 by 2035), matching the Glasgow Standard for Affordable Housing and supporting our goal of increasing our population while sustaining a vibrant and affordable housing market
- PBSA to enable our universities to continue to attract students from overseas and accommodate local students in fit-for-purpose living quarters
- Office – Grade A office and co-working and flexible work space to accommodate new, modern working patterns and preferences
- The establishment of an evidence base to support the development of fit-for-purpose industrial space to support our advanced manufacturing including lab space for rent for our life science and biotech ecosystems; and
- Mixed use – where developments may incorporate a mix of all of the above as well as retail and hospitality to create better places and neighbourhoods in the city centre for citizens, businesses and investors.
