‘More private sector interest in innovation districts’
Private investors’ interest in innovation and healthcare-related real estate is set to increase, experts agreed at Real Asset Media’s Innovation Districts, Winning Cities & Investment Briefing, which was held online this week.
‘Values such as health and wellbeing will become even more important after the crisis, and for that reason the sector will attract more private sector investment’, said Eri Mitsostergiou, Director of European Research, Savills.
As for innovation districts, ‘they have a long-term vision that offers long-term security of income to investors,’ she said. ‘They are productive, inclusive, promoting sustainable businesses, retaining and nurturing talent. In short, the very definition of resilience’.
Investors are increasingly comfortable with regeneration-driven initiatives and communities built from scratch, she said, just as they used to be ‘scared’ by mixed-use but now they have embraced its flexibility.
‘Investors’ interest will continue to grow, as they see mixed-use projects as being more resilient,’ said Ann Allen, Executive Director of Estates & Commercial Services, University of Glasgow.
The emergence of social and environmental awareness among investors is also playing a role, Mitsostergiou said: ‘These types of assets fulfil the criteria of impact investing as they have a positive social impact and environmental connotations too’.
Delegates agreed with this assessment. In a snap poll conducted during the online investment briefing, 71% of respondents agreed that there would be more private sector interest for innovation and healthcare-related real estate, while 19% thought interest would stay at the same level and 10% believed it would decline.
‘European funds are showing an interest in us,’ said Allen. ‘They are already moving into Scotland and wanting to be a part of what we do’.
For Scotland it is important to sell the innovation story with a single message and vision, even if the districts may then be competing for tenants. In order to achieve the maximum possible impact, ‘these innovation districts must present themselves together to the outside world,’ said Anna Stamp, Interim Programme Director, Edinburgh BioQuarter.
COVID-19 is posing new and unprecedented challenges to the creation of innovation districts, but it is also having some positive side-effects in encouraging collaboration and sharing of resources.
‘Historically, collaboration was seen within buildings, in a kind of silo approach, with a wealth of talent locked in,’ said Stamp. ‘The challenge was connecting the buildings and coming together across sites. Now that we have seen the coming together of science for COVID-19, a lot of barriers have been broken down’.
Innovation districts are a great showcase of positive, win/win relations between the public and the private sector, experts agreed.
‘The principle of a public sector lead is to be the catalyst and provide a platform that allows the private sector to come in and feel comfortable about taking on risk,’ said Graham Hill, Partner, City Executive, ARCADIS. ‘If the public sector leads on the vision, then the offer becomes more attractive for the private sector, and the place can become a real hive of investment’.
The ultimate goal is ‘achieving the perfect balance between the private and the public,’ said Alasdair Morrison, Head of Regeneration, Renfrewshire Council. ‘Local Government has a key role to play to facilitate and bring about change in the built environment and ensure sustainability’.