Blanchard Consultancy – the independent construction consultant

Land and property developer switches focus to sites offering a mix of housing and commercial premises.

MacDonald Estates, the land and property developer, is predicting further growth this year despite tough market conditions after posting a profit of £5.1m for 2007.

The figure is an increase of 14.1% on the previous year and the ninth consecutive year of profit growth for Macdonald, started by entrepreneur Dan Macdonald in 1998.

But the Edinburgh-based company is planning to shift its long-term focus from purely commercial developments to building strategic new “mini-towns” including a 330-acre site it has identified in central Scotland. Other sites include Inverness and St Andrews.

Macdonald, chief executive of Macdonald Estates, said that by 2012, its focus will be almost exclusively fixed on community developments, with local power generation, sustainability and infrastructure as well as commercial premises.

“I am confident we will see the continuation of further profit growth through to 2009 as a number of our developments reach maturity,” he said.

The first site to be developed is a 260-acre site at Balloch Farm, Inverness, with a mix of housing and commercial. All the sites Macdonald has identified are in areas which are likely to be rezoned. Balloch is up for zoning in 2011.

“These new settlements are going to be the focus of the business and will allow us to use the expertise we have built in working with planners from the outset rather than just slapping an application in for consideration,” said Macdonald.

“Some will have gestation periods of 10-20 years although others might come through more quickly.

“These are not the eco-towns that Gordon Brown talked about but smaller mixed developments in areas where there is demand.”

Some of the other future developments for the company include a planned £100m hotel and office development at the SECC Glasgow and construction work on a £30m development at Falkirk Gateway, which starts later this year.

Macdonald also has plans to open an office in Dublin, furthering a commitment to business in the Irish republic. Plans are about to be submitted for a ¤40m (£31m) retail park at Portlaoise, an hour’s drive southwest of Dublin.

Macdonald appointed former Scottish Enterprise Fife chief executive Joe Noble as director of strategic development and infrastructure for the company last month.

Macdonald said: “I am in no doubt that we will see recessionary times and hear more accounts of bank write-offs, a further slide in capital values, greater inflation, raised debt, high bank charges, fire sales and a restrictive residential market.

“We should not delude ourselves. The Scottish market will be affected to a great extent.”

Original story here.

Labels: Dan Mcdonald, Macdonald estates, property analysis, property development, property prices, Scottish property market

Knight Frank report says average prices rose 13% over the past year; compared to 5% British average.

THE Scottish housing market is set to defy the credit crunch and will continue to outperform the rest of the UK, according to a new report.

High rates of employment in the financial sector and sustained demand among young professionals for mid-priced city centre homes should mean that Scotland will escape “relatively unscathed” from the turbulence in the global financial markets, according to the study by estate agents Knight Frank.

The firm's analysis of house prices over the past year has revealed that they rose by 13% in Scotland, the biggest increase outside Greater London. Across the UK, the average price rise was 5.2%. The cost of new homes in Scotland rose by 20%.

While the credit crunch caused by subprime lending in America will dampen the market, the report predicts that prices in Scotland will continue to rise this year, bucking the trend across the rest of the UK.

Knight Frank's Scottish residential review predicts average house price inflation of 1% in Scotland, while prices elsewhere are expected to fall by an average of 3%.

“In Scotland the market is not as volatile as the rest of the UK, it doesn't have the same boom and bust culture,” said Liam Bailey, Knight Frank's head of residential research, who compiled the report.

“You don't tend to get the kind of speculation you get in the rest of the UK and that makes Scotland a healthier market.

“At best price growth will be 2-3% for this year and sales volumes will be down about 20%, but it's not a crisis.”

Bailey said a number of factors would protect the Scottish housing market from the downturn predicted for the rest of the UK.

These include the greater availability of social housing, fewer owner-occupiers, the strength of the financial sector - where the number of people employed directly has increased by over a third over the past seven years to more than 113,000 - and higher levels of employment.

The proportion of people of working age in employment rose in Scotland to 76.5% last year, 2% above the UK rate.

Gwilym Price, professor of urban economics and social statistics at Glasgow University and chairman of the Scottish Housing Economics and Finance Network, is in agreement with the report's findings: “The credit crunch is very new territory and difficult to anticipate but I don't think we will see a house price crash in Scotland,” he said.

Original article posted on TimesOnline

Labels: House market, Knight Frank, Scottish property market