Walking out onto Princes Street from Edinburgh’s Waverley station, past the iconic Balmoral Hotel, the city appears to have changed little in the decade since this writer last visited, save for trams whizzing around, a charming feature opened in 2014. Looking skyward, however, the sight of some impressively tall cranes offers the first indication of a major development underway.
This is Edinburgh St James (ESJ), billed by its developer and minority owner TH Real Estate as currently the largest privately backed regeneration project in the UK. Given its scale it would be foolhardy to challenge that assertion.
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When it opens in 2020, Edinburgh’s near 600,000 residents and four million odd tourists that visit annually to enjoy its ancient history and festivals – there are six in August alone – will have access to a modern shopping mall, luxury five-star W Hotel, new homes and Everyman cinema. Hurrah! Because anyone familiar with Edinburgh knows you do not go there for the shopping – literature, history, culture, the arts, yes, but not for a weekend of retail therapy.
The ESJ project has also become a standard bearer for sustainability initiatives in the private real estate sector, and not just in the environmental sense.
Sustainability through a wide lens
Real estate investors and managers are growing acutely aware that when they put their capital to work in a project, long-term value creation and investment performance of an asset is tied closely to the wider community in which it operates. Private money is playing a meaningful, indeed central role, in supporting and driving the resiliency and long-term socioeconomic wellbeing of localities. Assets survive when a neighborhood thrives is becoming a common mantra. That means ensuring the community supports the project, sees it as a value-add and uses the facilities on offer. And it often means creating jobs to sustain it.
“Back in 2006, when we bought the land, when people talked about sustainability it was all about carbon reduction, thinking about the use of energy and how you use it efficiently”, says Martin Perry, Edinburgh St James project director for TH Real Estate, “but we always viewed it as much more than that. Projects must also be financially sustainable too, and a critical component of that means improving the livelihood of the people in the communities we work in.”
Dutch investor APG, the majority owners of Edinburgh St James and strong promoter of ESG and responsible investing in the private real estate investment community, is also an advocate of sustainability goals that go beyond the environmental. “We were keen to use this project to forge a relationship with the community, because it is a large project and it has a big impact on the local community, we hope in a positive way going forward. Ultimately, the project will create in excess of 3,000 jobs and that’s helpful to us as an investor as well,” says Robert-Jan Foortse, head of European property investment for the firm.
Edinburgh St James is demonstrating best practice of sustainability in this much wider sense in several ways, both during the construction phase, of which it is in the midst, and beyond when the asset becomes operational.
A strong commitment to employ locally is built into the ethos of the project, explains Perry. Around 67 percent of the construction site workforce lives within a 50-mile radius of the city and a number of local businesses have been contracted to the project, too.
A construction academy is in operation, collaborating with local schools and colleges to help inspire the next generation of workers in the sector and to develop the modern skills required. Both school-age pupils and university students are enjoying exposure to the practicalities of a career in the industry in areas as diverse as planning, design and engineering. Graduates are currently onsite doing work placements. And there is a series of apprenticeships and volunteering initiatives in place. Employment was even found for some workers made redundant by another local company.
Then there is FUSE. Formally launched in March this year and part of a Growth Accelerator Model (GAM) agreed between Edinburgh St James, the Scottish government and City of Edinburgh Council, this program creates a retail and hospitality academy. When Edinburgh St James opens in 2020, it will generate 3,000 jobs. FUSE’s remit is to guarantee there are job-ready, highly trained staff ready to fill those vacancies on day one. And it is delivering this by creating pathways for school leavers, career changers and people looking to re-enter employment after a career gap, to find meaningful and fulfilling long-term careers in the sector.
Edinburgh St James
The facts, the figures
Location:New Town district, Edinburgh
Area covered: 1.7 million square feet
Architect: Allan Murray Architects
Developer: TH Real Estate
Contractor: Laing O’Rourke
Previous owner:TH Real Estate
Co-owners:APG – 75%; TH Real Estate – 25%
Asset type: Mixed use retail, hotel;
leisure and residential; office
Construction started: 2016
Anchor tenants: John Lewis; W Hotels
Opens: October 2020
Rochelle Burgess, associate director of Savills Project Management, says: “It’s the aspirations of the project and our investors to create sustainable employment in the long term, not only for Edinburgh St James, but for the wider retail and hospitality sector in Edinburgh, raising the profile of the sector as a worthwhile career choice.”
Winning hearts and minds
A unique feature of this particular project is the locality in which it is being built. Edinburgh is a UNESCO World Heritage site and community engagement has been taken seriously as a result throughout the project from design through to construction. A project of this scale, in such an ancient and historical site, can only be sustainable and ultimately successful for the owners if it has community backing.
There were strict planning restrictions to consider. The City of Edinburgh Council has a skyline policy protecting the famous views of the cityscape from the castle and Calton Hill. To get the project approved, and to get buy-in from a discerning population proud of their city, this had to be factored into the design. “The crescent shape of the design picks up on the geometric shape of Edinburgh’s New Town, so it very much has the structure of this part of the city in mind,” says Perry.
Edinburgh had got this badly wrong in the past. The original St James center, opened in 1975, was described as a carbuncle and a monstrosity, failing spectacularly to enhance the elegant listed Georgian-style properties surrounding it. When TH Real Estate originally bought the existing center in 2006, it was aware that any redevelopment had to complement Edinburgh. “If you look at shopping center development in the last 30 years, it’s often damaged the look of cities; from the outside you often just see just the back of shops. You can’t do that in Edinburgh. We deliberately set out to create something that fits with the city,” explains Perry.
The environmental component of the sustainability conversation remains important, especially in a UNESCO site, and the construction phase of a major real estate project throws up plenty of challenges. Again both TH Real Estate and the contractor Laing O’Rourke carefully considered this at the outset, and prioritizing sustainability and respect for the city’s heritage at the center of its agenda helped garner built-in support for the development of Edinburgh St James.
Perry explains: “The Scottish government is probably more sustainability focused than even the UK government, so they were always very supportive of us. And there are a lot of interest groups in Edinburgh looking at issues such as air quality and waste management; a lot of areas that as a business we focus on. We could show how we were going to deliver on these issues and construct in a very sustainable way.
“On a construction site, there’s lot of potential for pollution caused by noise, dust and vibration. We have a lot of monitoring points around the site to keep track of these problems on a regular basis. We’re very conscious that there are people living and working next to the site, so we work very closely with the community to minimize any disruption and impact on them.”
Irene Gibb, community liaison adviser for Laing O’Rourke, adds: “Communication is key with all stakeholders and businesses. We go out of our way not to make ourselves invisible, because that is what really upsets people. We are contactable 24-hours a day and we have to be prepared for any questions that are directed at us. It could be a noise complaint or something wrong with a road sign. We develop a rapport with people.”
Minimizing environmental and social impact is being achieved in different ways. First, by reducing the number of workers actually operating on site. “We are using as much offsite prefab as possible to reduce on-site construction. Virtually everything we are doing is assembled offsite. It is then put together like a jigsaw puzzle once it reaches the site. But this means we push the labor back to outlying factories in other localities,” says Perry.
Another positive effect of work being done away from site is better traffic management around the area, reducing residual pollution and congestion common around busy building sites. “We’ve been able to reduce traffic on the road by 30 percent,” claims Perry. “And that’s less traffic during construction of the new site than when the original center was in full operation.”
Another core sustainable target of the project has been to recycle demolition and waste material from the site. “All material is reused entirely. Close to 99 percent of everything that’s come out of the site has been reused. For example, the materials get crushed and then reused for reclamation at the port. Some of it has also been reused for other purposes such as road construction elsewhere in the city.” They’ve even gone as far as to reuse traditional cobblestones removed from another part of the city to refurbish a cobbled street, very much in keeping with the area around the site.
Sustainability will not come to an end in 2020 when Edinburgh St James opens. It will be a core feature when the complex is fully operational. And one plan is for Edinburgh St James to do its bit to improve the city’s capacity for electric cars. There are just 17 electric car charge points in Edinburgh. ESJ wants to create 150 more and make that accessible to people throughout the night when the center is closed and parking not at capacity; looking at how to maximize the utility of a space at all times. Retail, hotel, leisure and residential parts of the scheme are also being asked to share facilities – residents being allowed to use the hotel leisure facilities, for example – promoting the efficient use of space, savings costs and cutting energy and utility use across the site.
Compromises always have to be made, of course. On this project, the use of photovoltaic, a standard sustainable feature of new developments nowadays, has been forgone. Here, locality has been an Achilles heel. Simply, you cannot have unsightly solar panels on a building overlooked by millions from Edinburgh Castle. The view over the city is non-negotiable.
Whipping up a little controversy
Mixed reaction to Edinburgh’s new five-star hotel
London has the The Gherkin. Now Edinburgh has a building with a unique moniker. For the new W Hotel has been dubbed by some as the Walnut Whip, by others to a Mr Whippy ice cream, due to its unusual ribbon-like design spiraling up from the middle of ESJ into the Edinburgh skyline.
While much effort was put into ensuring the new mall was in context with its 18th century Georgian-style surroundings, respecting the city’s architecture and sustaining its heritage into the future, this landmark feature pushed buttons when planning was being considered back in 2015. In an interview with The Times newspaper, author Candia McWilliam called it “heartbreaking” and a threat to Edinburgh’s heritage. While in an interview with the BBC, Dr James Simpson of the UK committee of the International Council on Monuments and Cities, criticized its height for obstructing views and infringing the council’s planning rules, and claimed it was “actually worse than the [original] St James Center” – quite an assertion. In the end, planning was approved, providing Edinburgh with a new facility to absorb the growing number of visitors to the city, and ultimately helping to sustain economic growth generated from tourism.