Introduction

This chapter examines the literature and new qualitative evidence on property market research within the Central Scotland region. It is primarily concerned with the way in which industrial land and city office markets contribute to, or detract from, urban economic competitiveness. Land and property are generally seen as part of the set of hard assets and are typically viewed as ‘drivers’ of urban economic competitiveness (Begg, 1999). Scottish Enterprise (SEN – the agency that promotes economic development in Scotland) considers these drivers as central to the enhancement of the ‘physical business environment’ of cities and regions (1996).

These aims have to be located in a wider understanding of the fundamental questions they relate to, namely:

• • What is urban economic competitiveness?

• • How should one conceptualise the urban economy?

• • How can urban land and property markets be conceptualised?

In addition, however, public agencies intervene in land and property markets and, like analysts, they have a relatively well or poorly developed framework with which to conceptualise the property market. In particular, the focus is typically on the demand for property as a derived demand of wider business demand (according to the property industry) or as a relatively unproblematic factor market (urban analysts) that may or may not operate efficiently (Ball et al, 1998). In Scotland, for instance, policy is increasingly guided by a market failure framework. As with the ‘big’ concepts highlighted above, this market failure framework has to be critically assessed. In this chapter we draw on a selective review of the literature augmented by evidence from various Scottish sources, including recent research for Insignia Richard Ellis.

The structure of the chapter is as follows. The second section looks more closely at the way property and land markets are conceptualised, distinguishing the real estate economics textbook view from a range of institutional perspectives. Section three begins with a discussion of urban economic competitiveness and the role of property. It then goes on to examine the ‘hard asset’ view of property as a driver of urban economic competitiveness. Finally, in section three, the views of key actors within the Scottish property sector are consulted.