Dundee makes investment bid
DUNDEE’S £1 billion Waterfront regeneration has moved into its “real phase”, one of its prime movers has claimed, with efforts now being stepped up to stimulate the next wave of investment in the ambitious project.
The public-private project was conceived around two decades ago to transform the city’s economic fortunes through a mix of heavy public and private sector investment, spearheaded by prestigious outpost for the V&A Museum at the heart of the riverside.
Phase one of the project is close to completion, with work on the new V&A and railway station almost complete, and 240 acres of mixed use development opportunities opened up on the waterfront area.
With that infrastructure in place, Mike Galloway, executive director of city development at Dundee City Council, said the focus now is on attracting private investors to move into the riverside. Such investment, which will range from hotels to high-quality built-to-rent flats, is crucial to the city’s hopes of providing an economic boost to Dundee arising from the Waterfront project.
Mr Galloway said: “I think we’re into the real phase now of the project. We’ve created the context. We’ve got those big, landmark, signature buildings complete, and it’s now getting into the real meat of creating the jobs and the activity in the area.”
While the needs of the public and private sectors can often clash, Mr Galloway said they have found common purpose in Dundee. He noted: “I think we recognised right at the beginning of the project, which is nearly 20 years ago now, that we had complete and total market failure in the waterfront area, and perhaps you could argue beyond that in the Dundee market generally.
“There was a number of opportunities, but the private sector wasn’t really taking those up. We felt what was necessary was the public sector to intervene, to tackle fundamental issues in terms of infrastructure and in terms of image and certainty.
“On the back of that, what was based on a very strong master-planning process, we have been able to gradually change the impression of Dundee as a place to invest amongst the private sector.”
Mr Galloway added: “The masterplan allowed them to understand where they sat within an overall context.”
Around half of the £1bn expected to be poured into the regeneration will be focused on the waterfront area. Significant strides have already been taken to establish the port as a centre of excellence for North Sea oil and gas commissioning work, as well as a centre for deploying offshore wind infrastructure.
Mr Galloway reported a “level of developer and investor interest” in each of the plots.
He said: “What we are trying to do, and I think it is the main task left for us now, is to manage the process of how we deliver that development interest because not all of it can happen at the same time. We would flood the market, and self-defeating action like that is something we are determined not to manage.”
The initial development focus, he said, is on two sites – plots two and six. Both are adjacent to the railway station and one, which is beside the V&A building, has an office block under construction. It will be completed by next spring.
“We are in advanced negotiations with Marriott, for an upscale hotel directly opposite the V&A itself, and then the remainder of site six will be residential apartments,” Mr Galloway said. “Again, we have a partner there in Edison. We are in the last throes of the discussion to sell then that site.”
As regards the other site in initial focus, a joint venture has been formed with Our Enterprise Limited for a mixed-use development, including build to rent housing for young professionals. “It will be the first PRS (private rental scheme) development in Dundee,” Mr Galloway said, adding that the space will also include offices and an incubator hub for businesses in the creative sector.
“Creative industries are one of the main sectors, we believe, for Dundee’s future economy,” Mr Galloway said. “What we want to do is help those businesses to form and to grow.”
Mr Galloway used an air traffic analogy to describe the process of managing the investment process, explaining that subsequent sites will be brought into play as progress is made on the sites under development.
Asked why Dundee has backed PRS development when there have been suggestions that the model has been opposed by other cities, he replied: “We see it as being potentially very important to the city. Our economy is now a knowledge-based economy, rather than an industrial economy. Our two universities are hugely important; we have got 40,000 full-time students in the city, and the vast majority when they graduate leave the city and go elsewhere.
“We would like to try and keep as many them as we can and get them to form new businesses and grow. One of the things we need to do is part of that persuasion process is not only to provide job ad business opportunities, but also the right type of housing for these young professionals and business people, and PRS seems to be something that has been very successful in achieving that in major cities in England. [In] Manchester, Birmingham, these sort of cities, PRS has been fundamental in creating that urban professional that we would want to develop in Dundee.
“It does mean you are creating a lifestyle choice, because they tend to be smaller in the private space but larger, more generous in their public space. But you are paying a rental premium for that because of the high level of service and maintenance as part of that package.”
He added that there are currently two PRS projects in the pipeline for Dundee, which he would like to see delivered. “We’re quite optimistic about PRS, perhaps that marks us slightly differently from the central belt cities,” Mr Galloway said.
Asked whether the project has given the people of Dundee a lift, he said: “Very definitely. I think people now actually believe us. We have been saying for 20 years we were going to deliver this kind of regeneration. Dundonians now believe it is going to be delivered.
“The most important thing, and the issue uppermost in their minds now, is how do we ensure that everyone in the city benefits from this process. There is absolutely no point in us bringing well-paid jobs into the city if Dundonians are not getting access to them, if that regeneration doesn’t touch some of our most disadvantaged community elsewhere in the city.
“We are spending a considerable amount of time and effort to ensure that it’s a deeprooted regeneration. For example, all of the developments that are occurring in the central waterfront, we have committed ourselves [to ensuring] that will pay the Living Wage. Now that isn’t just during their construction, but also the businesses that will occupy them.”
He also noted that the recruitment of staff will be done through local employment initiatives.
A view of the Tay Bridge across the Firth of Tay in Dundee. It is hoped the massive £1bn regeneration of the Waterfront area will transform the city’s economic fortunes.
Work on the stunning new V&A, designed by Kengo Kuma is almost complete.
Mike Galloway wants private investment.