Dundee has been identified as the new capital of buy-to-let investments in Scotland, surpassing the more traditional investment hubs of Glasgow and Edinburgh. This shift, brought to light by the property and legal consultancy Gilson Gray, highlights the transformation Dundee has undergone in recent years.

Dundee, often known as the “City of Discovery,” is experiencing a renaissance. Significant investments in urban regeneration, especially along the waterfront, the proposed development of the Eden Project, and the construction of a new 4,000 seat e-sports arena, have positioned Dundee at the forefront of Scotland’s property market. These developments not only boost the city’s appeal but also signal a new era for its economy, particularly in the gaming industry.

Impact on the Property Market

An analysis of data from Citylets reveals that Dundee has seen the highest increase in rents over the past year. Averaging a 16.9% increase across all property sizes, Dundee’s growth outpaces Edinburgh’s 16.5% and Glasgow’s 15.6%. This trend is evident across different property types, with one-bedroom flats seeing an 18.3% increase and two-bedroom properties experiencing a 16.2% rise.

Five-Year Growth Comparison

While Dundee’s five-year rental growth of 53.6% is slightly behind Glasgow’s 53.9%, it’s essential to note the rapid catch-up. Over a decade, however, Dundee’s 67.2% growth lags behind Edinburgh’s 95.5% and Glasgow’s 88.5%.

Factors Driving Demand in Dundee

The demand for rental properties in Dundee has been bolstered by several factors:

• The presence of two universities in Dundee, along with spill-over from St. Andrews University.
• Growth in life sciences and biotech sectors, centered around Ninewells Hospital and Medical School.
• A thriving gaming and technology business community.

Insights from Industry Experts

Marcus Di Rollo’s Perspective

Marcus Di Rollo, the lettings director at Gilson Gray, highlights Dundee’s major transformation and evolving perceptions. He points out the impact of major infrastructure projects, a growing local economy, and a substantial student population on the property market.

Investment Opportunities and Trends

Di Rollo emphasizes Dundee’s attractive investment potential, citing the city’s relatively low entry barriers compared to other Scottish cities. For the cost of one property in Edinburgh, investors can acquire a portfolio in Dundee, often yielding returns as high as 10%. Additionally, some landlords are shifting their investments to Dundee due to policy changes in other regions, like the licensing for short-term lets.

The Future of Dundee’s Property Market

While acknowledging that long-term capital growth in Dundee may not match other cities, Di Rollo remains optimistic about its competitive edge. Gilson Gray’s Dundee team, managing around 160 rental properties, has witnessed growing landlord interest in the city, a trend expected to continue in the coming years.