A Regional Perspective on the Impact of the Privatisation of the UK Public Industrial Property Stock

Abstract

There has been a long tradition, dating back to the 1930s, of promoting regional development in the assisted areas of the United Kingdom through the provision of industrial units. At the end of the 1980s the government decided that the time was then ripe to sell off the publicly owned portfolio of industrial and commercial property, which was predominantly to be found in the peripheral regions of the United Kingdom. The author charts the privatisation process in England and Scotland. It had been envisaged that the sale would lead to higher rents and invigorate private sector investment. More than a decade on, the author seeks to assess whether this forecast/hypothesis proved correct. The Scottish experience is used as a case study of the UK privatisation programme operating in a peripheral region, and the impact is assessed at two levels: on the Scottish market as a whole; and in the postprivatisation experience of the former publicly owned industrial estates. The original forecasts of the Conservative government prove to be naïve. No evidence of a wide-scale rise in rents, or speculative development, was found, nor has there been an increase in institutional investment in industrial property; the public sector has begun to intervene again—albeit in a different guise.