Read our Chair's address to the Scottish Parliament on behalf of Real Estate:Scotland RES Chair's Speech for Parliamentary Reception 2026

Thank you for the opportunity to address you today in the heart of the Scottish Parliament on behalf of Real Estate Scotland. I would particularly like to thank Paul McLennan MSP for hosting this event and I would also like to thank the Robertson Group for kindly sponsoring this evening.

I stand before you representing an industry that supports over 40,000 direct jobs in Scotland and another 164,000 in construction. An industry that builds the homes families need, the workplaces businesses require, and the communities where Scots thrive. The property sector in Scotland makes a significant contribution to the Scottish economy and also has a substantial social impact.

Today, I want to share with you both the extraordinary potential our industry offers Scotland, some headwinds we must navigate together, and—importantly—some genuinely encouraging signs that collaborative partnership between government and industry can unlock that potential.

Real estate isn't simply about buildings and financial returns—it's an economic multiplier that touches every corner of Scottish life. Every development project creates a cascade of employment: architects and engineers, contractors and subcontractors, suppliers and service providers. This goes to the foundations of the Scottish economy—it's skilled joiners, electricians, plumbers, and labourers earning wages that support Scottish families and sustain local businesses. All paying their taxes and not reliant on financial support.

Consistent development activity creates apprenticeships and career pathways for young Scots. When we deliver a steady pipeline of projects, construction firms can confidently train the next generation. School leavers gain routes into skilled trades that offer genuine career progression and good wages.

But this pipeline depends entirely on one thing: development viability. Without financially viable projects, the work stops. The apprenticeships disappear. The skilled workforce disperses. And Scotland loses not just buildings, but the human capital our economy depends upon.

Beyond economics, our sector delivers extensive social infrastructure. We don't just develop property—we create communities where children play safely, neighbours gather, and local economies flourish. Through Section 75 obligations, we contribute towards schools, healthcare facilities, transportation infrastructure, and affordable housing.

Development projects across Scotland demonstrate how strategic property investment regenerates areas, creates vibrant mixed-use communities, and improves quality of life for thousands. Real estate literally builds the physical foundation for social progress.

Yet here's the fundamental truth: we cannot deliver any of this—not the jobs, not the homes, not the community infrastructure—if projects aren't financially viable. And right now, across Scotland, development viability faces significant headwinds that require our collective attention.

Let me be direct about the challenges we face. Property development viability has deteriorated significantly. Construction costs have risen over 20% in just four years. The cost of borrowing has reached levels not seen for decades. At the same time property values have barely risen, either due to the cost of living or softer yields. These aren't factors we control—they're global economic realities.

But domestic policy has compounded these pressures rather than alleviating them. Land and Buildings Transaction Tax adds upfront cost. Section 75 obligations, while delivering necessary infrastructure, often push marginal projects into unviability. Empty rates add to holding costs whilst preparing for redevelopment, and now we face the new Building Safety Levy—another cost layer on already stretched economics.

I want to share a stark example that illustrates where we've arrived. Recently appraising a prime central Edinburgh site—exactly the kind of location where we should be delivering residential units, creating homes, jobs, and urban vitality. The financial analysis was sobering: it was more viable to develop alternative uses than homes.

Think about that for a moment. In Scotland's capital city, in the midst of a housing crisis, converting a development site to residential use simply doesn't stack up.

Similar calculations are happening across Edinburgh, Glasgow and across Scotland. Developments that should be economically viable—residential schemes in established locations—simply don't work financially. Developers aren't being unreasonable or greedy. They're following basic mathematics: if costs exceed revenues, projects don't proceed.

I need to state something that sometimes makes people uncomfortable but is absolutely fundamental: development needs to be profitable, or it will not happen.

This isn't about excessive returns or developer enrichment. It's about basic economics. Development carries enormous risk—land acquisition costs, planning uncertainty, construction delays, market fluctuations. Investors—often pension funds representing ordinary Scots' retirement savings—require returns that justify those risks. If the returns don't materialise, the capital flows elsewhere: Manchester, Birmingham and other English cities, or to different asset classes entirely.

When development is unviable, the consequences ripple across society. Fewer homes get built, worsening the housing crisis. Regeneration stalls, leaving town centres declining. Job creation slows. Young people lose career pathways into skilled trades. Communities miss out on infrastructure improvements that Section 75 would have delivered. Everyone loses.

Which brings me to why I'm particularly encouraged this evening. The Scottish Government's recent announcement of a new programme to support Scotland's real estate sector on the international stage represents exactly the kind of forward-thinking, collaborative partnership our industry needs.

This initiative—supporting Scotland's presence at major international real estate events like MIPIM and UKREIF—demonstrates genuine recognition that our sector is a critical partner in delivering Scotland's economic ambitions.

By creating a coordinated partnership approach to promoting Scotland internationally, the Scottish Government is sending a powerful signal to global investors: Scotland is open for business, we understand the importance of real estate investment, and we're backing our sector with meaningful leadership and support.

This matters enormously. At these international gatherings, Scotland will compete for capital against Manchester, Birmingham, Dublin, and cities across Europe. Having Scottish Government backing—creating opportunities for investors to engage directly with ministers, local authorities, and industry leaders—transforms our competitive position. It gives us a unified voice and a professional platform to showcase the extraordinary investment opportunities Scotland offers.

The Scottish Government's Programme for Government, announced two weeks ago, rightly focused on improving Scotland's economy and specifically recognised the role of the private sector in delivering economic growth through increased private capital investment. This international promotion initiative gives that recognition practical expression. It is policy translated into tangible support.

Real Estate Scotland exists to work in genuine partnership with government to address development viability challenges while advancing shared objectives. We recognise Scottish Government goals—economic growth, housing delivery, net zero transition, community development—because they're our objectives too.

The international promotion programme demonstrates the productive outcomes possible when government and industry collaborate effectively. We now need that same partnership approach applied to the domestic policy environment affecting development viability.

Our ask is that policy frameworks recognise commercial realities alongside social objectives. We need planning systems that enable appropriate development. Tax structures that encourage rather than deter investment. Regulatory approaches that balance necessary standards with practical deliverability.

This doesn't mean abandoning important policy goals. It means designing policies that achieve those goals without inadvertently destroying development viability—exactly the collaborative spirit reflected by the international promotion initiative.

Despite current viability challenges, I remain genuinely optimistic about what we can achieve together. The Scottish Government's backing for international promotion demonstrates openness to partnership that can extend across the property sector.

Scotland possesses extraordinary assets: world-class universities, stunning heritage, strong legal and financial sectors, and a quality of life that attracts global investment. Our sector stands ready to deliver the housing Scotland desperately needs, to regenerate town centres, and to build the infrastructure supporting economic growth and deliver a positive social impact for our communities.

The international promotion programme will help attract the capital necessary to deliver these outcomes. But we also need domestic policy environments that enable that capital to be deployed viably when it arrives.

Members of Parliament, the international promotion initiative demonstrates thoughtful recognition that supporting our sector serves Scotland's broader interests. I urge you to extend that collaborative approach across the full policy landscape. When government and industry work in genuine partnership, we unlock Scotland's extraordinary potential.

Together, we can build the Scotland our young people deserve: with career opportunities in skilled trades, quality homes across all tenures, regenerated communities, and the economic foundation for shared social prosperity.

The Scottish Government's initiative shows this partnership is possible. Let's extend that spirit across the full policy landscape.

Real Estate Scotland looks forward to continued partnership with this Parliament to enhance the prospects of Scotland's future.

Thank you for your time and attention. Thank you once again to our host this evening Paul McLennan MSP and I would also like to thank the Robertson Group for kindly sponsoring this evening.

Please enjoy the hospitality of our hosts, thank you.