IT read like just another scare story in a profoundly Unionist newspaper, but something just did not ring true about Scotland’s “neverendum” hurting the property investment market.
The Sunday Times “scoop” was based around a paper by Professor Colin Jones of the Urban Institute at Heriot-Watt University.
He is quoted as saying: “Political risk created by the neverendum increased uncertainty and had a negative effect on sentiment, with reduced real estate investment by UK investors. The political risk of the neverendum is the consequences of independence.”
Today The National can expose this latest Project Fear scare story as not all it’s cracked up to be – revealing that Jones’s research is being published in a lowly ranked journal, Property Management, after a prior peer review of his work rejected it as an academic paper because it was poorly researched.
An academic specialist whom we approached, and who did not wish to be named, confirmed that he had reviewed it for another journal and had recommended rejection. He told that journal the paper lacked an appropriate methodology and said the analysis needed to be more rigorous.
The academic told The National yesterday: “This is not an academic paper. It is not even a decent ‘research’ paper from a firm of surveyors. It contains nothing new in terms of data or argument.
“Indeed, it is methodologically lacking and is inappropriate for an academic journal. The paper uses market reports and some basic background material, but an appropriate literature review, which might have informed an appropriate methodology, is entirely lacking.”
He added: “This is a poor paper with a poor analysis. The tone of the paper is inappropriate for an academic analysis, starting from the use of the term ‘neverendum’ which is strongly value-laden.”
Highly unusually, the Sunday Times also printed details about the paper before its publication. That has caused some embarrassment for the university.
Professor Michael Danson, also of Heriot-Watt University, told The National that the paper “stretches the credibility beyond breaking point” – adding the paper actually talks up international investment in Scotland.
READ MORE: Documents reveal John Major’s ‘success’ in keeping Scotland quiet
Danson told The National: “As Jones concedes, international and domestic investors are likely to be taking quite different views of the long-term potential of the Scottish economy.
“As he says, in recent years, overseas investment in Scotland has been at record highs. In the run up to the independence referendum property markets in Scotland did very well and that continued after the result. Any negativity has been from UK institutional investors.
“The prejudices of the London establishment have damaged the prospects of all parts of the UK as the economic decline of northern England towns and cities demonstrates.”
He continued: “Comparing economic growth across the UK shows Scotland ahead of everywhere but London and the South East, it is disingenuous therefore to pretend that London is the UK in analysing relative and economic performances.
“Indeed, Jones concludes that, far from the 2014 referendum having an adverse effect, investors made no substantial change in their investment sentiment and Glasgow and Edinburgh outperformed the rest of the UK throughout the period to 2016.
“More up-to-date research shows a buoyant property market in both Glasgow and Edinburgh – have a look at the cranes across the skyline of each city.”
Danson added: “Jones reveals that international investors are ‘generally unconcerned about potential independence’ and are investing in Scotland as it is offers much better returns than English cities and so is offering better opportunities than elsewhere across Europe.
“The issues he fails to highlight that follow from his own limited research are the clear prejudices of UK institutional investors and that the international marketplace sees Scotland as a nation with investment opportunities in a stable political and economic system.
“Apparently Scotland is seen as a great place to invest in now and into the future with independence likely to increase demand, perhaps even London investors may recognise that there is life outside of London in such a European country.
“He has certainly contorted his own logic and evidence to try to support some poorly constructed hypotheses and analysis. Basing an academic paper on four, sometimes five, interviews is stretching the credibility well beyond breaking point.
“His own conclusions should be revisited to provide a much better balanced view as he has tortured the evidence to fit his predetermined outcomes.”
The National asked Jones to confirm that his paper had been rejected and also asked him why he used the term neverendum.
We were told Jones is “away” but we will publish his response when we get it.
BACKGROUND: How a classic Unionist scare story quickly fell apart under scrutiny from experts
THESE days, with email trails and a little bit of insight, you can usually deduce how and why a scare story about Scottish independence comes about.
Make no mistake, that was the real intention of much of Scotland’s media when it ran with Professor Colin Jones’s work – to stir up fear that a second referendum on independence would damage investment in Scottish commercial property.
As the former commercial property correspondent of The Scotsman, it took me two phone calls to establish that Jones’s research was out of date and therefore his claims about a “neverendum” were wrong.
For, in fact, as we show in the adjoining article, Scotland’s commercial property sector boomed through the whole of last year. Edinburgh and Glasgow are festooned with tower cranes and the undoubted flattening out of investment in the first half of 2019 was almost entirely due to Brexit and the failure of the Tory government to get its deal through Parliament.
READ MORE: Scottish Labour and Tories face total wipeout at General Election
So presented with a research paper written by a senior academic, newspapers went for the angle which most suits their editorial viewpoints, and highlighted Jones’s finding that the “neverendum” was killing investment in Scotland.
They were not to know that fellow academics had rubbished Jones’s work. We suspect they are only finding that out now by reading this paper today. But we’re not drawing this to your attention just to have a pop at other newspapers – we feel it’s an important retort to a story that has already been re-tweeted and “liked” on social media more than 1000 times.
The National was first alerted to the issues behind Jones’s work by Twitter. Professor Iain Docherty, dean of the Institute of Advanced Studies at Stirling University, got hold of the Jones study and tweeted: “It is *very* unusual for an academic article to be trailed to the press before it is actually published and therefore available to read.”
So I have acquired a copy of the ‘neverendum’ property investment article that has been doing the rounds in the press since Sunday. It is *very* unusual for an academic article to be trailed to the press before it is actually published and therefore available to read.
— Iain Docherty (@iaindocherty) July 16, 2019
1/n
Docherty then quoted from the paper: “SNP had had three years to drive the agenda for what agreed was a once in generation decision. The result of the election appeared decisively against ind(y) with 55% voting No. No sooner was the vote over that the SNP leader declared that No voters had been tricked or misled.”
Docherty added: “You can make your own mind up about the choice of words in that section.”
Docherty went on to dismantle Jones’s research before concluding: “So there we have it. A story all over the press that relies on the conjecture of 4/5 people of whom we know nothing, numbers that don’t provide much back up for the central assertion – and that run out before recent major investments contradicting the central argument.”
National readers were also alerted thanks to our columnist Andrew Wilson, who wrote in yesterday’s paper: “I was surprised to see media reports from a Scottish-based professor suggesting what he rather unacademically dubbed a ‘neverendum’ was damaging real estate investment. Having now read the source paper, it is clearly based on a wafer-thin analysis and extremely dubious economics.
READ MORE: Andrew Wilson: Neverendum? It’s never-ending nonsense
“He doesn’t explain why the real chaos of Brexit is drowned out to our detriment by a potential choice for Scotland to stay in the EU.
“Indeed, he doesn’t attempt to. What he has is interviews with five real estate professionals… “Serious analysis of the real challenges facing the Scottish economy and how we meet them must always be welcome. Cheap headlines based on dubious economics and wafer-thin analysis that can only damage our country’s reputation with actual investors? Not so good.”
Another academic with expertise in property spoke on condition of anonymity. He told The National: “One issue that is mentioned but is unexplored in the paper is that international investment increased in Scotland while UK/English investment fell.
“A more objective and more curious mind might have seen that as the core finding of the ‘analysis’. Why did overseas investors increase their investments while UK investors reduced theirs? Dominant narratives and prejudices should surely be considered.”
ANALYSIS: Truth behind the story: ‘Indyref2 just isn’t seen as a material
reason not to invest in Scotland’
THE problem with the paper by Professor Colin Jones, and by association the stories in the Sunday Times and followed up by The Scotsman, is that it is plain wrong and completely out of date.
Earlier this year, the highly reputable property company Knight Frank reported to the Scottish Construction News that 2018 had been a boom year for investment in commercial property.
Knight Frank said more than £2.5 billion was invested in commercial property – including offices, retail, industrial and specialist property – in Scotland during a resilient 2018, above the £2.46bn average since 2014.
The key point they made was that UK funds increased their investment by 58% in 2018, rising from £487 million to £771m – a huge increase of 255% on the 2016 figure of £217m.
According to Knight Frank, overseas investors were the most prolific purchasers in Scotland, accounting for £920m (36.8%) of the overall figure.
The magazine reported that around two-fifths, or £1bn, was spent on offices across Scotland, with Glasgow, Edinburgh and Aberdeen taking up the lion’s share of £897m.
Knight Frank’s survey found that “investment in retail dropped from £665m in 2017 to £550m last year, mirroring trends seen across the UK”.
Investment in Glasgow offices hit its highest level since 2006, at £468m. This included large deals for the Skypark campus in Finnieston, the forward-funding acquisition of Atlantic Square on the Broomielaw, and Legal & General’s purchase of Atlantic Quay 3 for £50m.
A lack of available stock saw investors acquire £284m of offices in Edinburgh – down on 2017’s £411m. The biggest deal of the year was the £71m purchase of New Uberior House by MAS Real Estate. Knight Frank advised MAS Real Estate on the acquisition.
The Aberdeen investment market continued its recovery from the oil price drop which began in 2016 with £145m of investment. However, this was predominantly made up by the £114m deal for Aker Campus at Dyce.
Alasdair Steele, who is head of Scotland commercial at Knight Frank, said: “It was a solid year for Scotland as we saw UK funds return to the market and overseas investors maintain their high level of interest.
“The demand for Scottish commercial property has seen prime yields edge towards 4.5%; but Edinburgh and Glasgow, in particular, still offer good value compared to London and some of the UK’s other major cities.
Will Scarlett, director of Scarlett Land and Development, told The National: “My view is that investors are currently more concerned about Brexit and if there is to be a slowdown this will be UK-wide for that reason.
“Indyref2 may well come into play once we know what effect Brexit has, but currently it does not seem to be a material consideration as a reason not to invest in Scotland.”
An academic specialising in property told The National: “Both Edinburgh and Glasgow office markets are now doing well despite, perhaps because of, talk of indyref2.
“If and/or when the UK leaves the EU and if Scotland were to become independent within the EU, property investment opportunities would surely increase – not least from English-based companies seeking an English-speaking base that would involve minimum disruption.”
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