In The Future of Glasgow’s Real Estate, Savills said: “Student housing has been the main source of development in recent years, building out many sites which might once have been for residential or office”.
He added: “The university sector is driving investment and development in to the city in what have been economically challenging times. Along with a number of entrepreneurial, forward looking mixed-use developers they are to make Glasgow an even more vibrant place to live, work and play. As the report findings show, it is an exciting time for the city. More private funding is required to maintain momentum and for Glasgow to rival the ‘Northern powerhouses’ of places like Leeds and Manchester.”
There are currently 12,000 student beds, catering for a student population of 67,000.
In the year to June 2016, 4,749 new homes were completed within Greater Glasgow, of which 31% were social housing tenures. “This is significantly short of the 6,110 new homes per year identified as required by the Clydeplan Housing Need and Demand Assessment,” said Savills.
With Glasgow’s projected household growth rate and the average annual completions of 518, there is a potential shortfall of 11,000 homes over the next five years, excluding historic undersupply.
The report added that the 22% shortfall offers a huge opportunity for housing developers. Rental properties are also in demand, with rental now accounting for 20% of all households within the city and rents up 16% between 2011 and 2015.
Bruce Patrick, head of commercial and mixed use development across Scotland, said developers are focusing on mixed use schemes in the city. “There has been a surge in activity across almost every aspect of the city’s real estate, whether we are talking about infrastructure investment, housing demand or commercial and industrial activity.
“There are a number of strategic sites in the pipeline where developers and funders are seeing the benefit of combining multiple uses and cash flows in order to get projects out of the ground, thus creating vibrant places where people want to live and work.”