By Nicola Bulley, Director of Marketing & Business Development
Real estate has always been cyclical, but the challenges facing the market today are unlike any seen before. Rising debt costs, stalled schemes, regulation and the drive towards net zero are reshaping the landscape, and exposing a clear need for specialist intervention.
For every project that’s progressing, there are others that have stalled. For every asset trading, there are those drifting into obsolescence and without a direction. Yet within these challenges lie opportunities, if you know where to look, and how to act.
That’s where Teesland Development Services comes in.
Development management has always been at the heart of Scarborough Group’s DNA. Reviving the Teesland name and brand gives sharper definition to that role, creating a dedicated platform designed to help lenders, investors, occupiers and the public sector unlock value from land and assets that have lost direction.
The market need has rarely been greater. According to Bayes Business School’s UK Commercial Real Estate Lending Report, around £32.6 billion of commercial real estate loans are due to mature in 2025, signalling continued refinancing pressure across the sector. This forms part of a multi-year trend following the low-interest financing cycle of the 2010s and early 2020s, when many borrowers locked in cheap debt at higher leverage.
Now, with elevated base rates, tighter credit conditions and shifting valuations, a growing proportion of those facilities are moving into refinancing or restructuring territory, creating significant challenges for lenders.
The drive to decarbonise the UK’s built environment is also accelerating and, for property owners, it’s becoming impossible to ignore. Energy performance is no longer a tick-box exercise; it’s a determinant of value.
Under the Government’s Minimum Energy Efficiency Standards (MEES), Proposals currently under consultation would require all commercial buildings to achieve an EPC rating of ‘B’ by 2030. If introduced, the implications would be far-reaching. Current estimates suggest that up to 85% of existing office stock would fall short of that threshold, representing billions in potential capital expenditure and a growing risk of stranded assets.
For landlords, the reality is stark; anything rated below EPC B could soon be unlettable, cutting off rental income and eroding asset values. Lenders and investors, too, face exposure as non-compliant properties lose liquidity and appeal.
Yet within that risk lies opportunity. The transition to a low-carbon economy is already reshaping demand, occupiers are seeking high-performing, sustainable workplaces that align with their ESG ambitions. For those willing to act, repositioning or repurposing underperforming assets isn’t just about compliance; it’s about building long-term resilience and value.
This is the new reality of real estate, where sustainability, viability and value are inseparable.
Across the UK, the public sector controls one of the nation’s largest and most complex property portfolios, over 1.7 billion square feet across more than 136,000 buildings, according to the Government’s State of the Estate 2023–24 report. Maintaining that estate costs taxpayers more than £21 billion a year, underlining both its scale and the urgency for reform.
Government strategy is clear; right-size the estate, improve quality and deliver a modern, sustainable public sector footprint by 2030. But reality often lags ambition. Fragmented ownership, ageing assets and limited in-house delivery capacity frequently slow progress, leaving valuable land and buildings under-utilised or obsolete.
That inertia carries a cost, financial, social and environmental. Every year of delay locks up capital, inflates maintenance costs and prevents these assets from being repurposed to support housing, jobs and community use.
By combining public-sector ambition with private-sector delivery, dormant value can be unlocked and regeneration accelerated. For councils, NHS trusts and government bodies, property isn’t a liability, it’s a catalyst for renewal.
While headlines focus on stress, we see potential. Across the UK, viable projects are stalled, assets underperforming, and public estates underused. Teesland Development Services steps in to unlock that value, stabilising, repositioning and delivering where others can’t.
Our capability is built on a proven track record of delivery. Originally reorganised and expanded under Scarborough Group’s ownership in the 1990s, Teesland grew into one of the UK’s leading development and fund management businesses, managing over £5 billion of assets across 14 countries before its sale to Valad of Australia in 2007. Today, that legacy of delivery underpins a new mandate; helping lenders, investors and the public sector turn complex situations into progress.
The market isn’t broken, it’s evolving. The next decade will belong to those who act with focus and foresight. Teesland Development Services is built for that moment.
