The announcement that London’s Victoria & Albert museum (V&A) is to create an outpost in Dundee may have come as a surprise to those who view the city as one in perpetual decline. But for many others, including residents, investors and developers, this cultural boost is yet another reason why Dundee, one of Scotland’s few development hot spots, is beating the slump.

“It’s an attractive prospect to those looking to invest in property,” says George Solley, director of property sales at Thorntons. “Dundee has been on a high. It’s a developing city and the residential property market has increased over the past four or five years.

“High-value, top-end properties are now available in Dundee and they just weren’t there before. There’s also a healthy base for the property market that wasn’t there in previous years. As a medium-to-long-term investment, the city is seen as providing good value for money for investors.”

Michael Dix’s High Mill Court flat, in a former jute mill, shows how smart apartment-living is becoming in Dundee. Working with local developers Brian Doig and Roy Walker and the architect Peter Gunning, Dix, an interior designer, created a contemporary apartment in the shell of the 19th-century, A-listed building.

The design has kept original features such as the cast-iron columns and barrel-vaulted ceilings while adapting the space to modern, open-plan living.

The £260,000 apartment was awarded a commendation in the best interior design category at the 2007 Dundee Institute of Architects awards. After refurbishing it, Dix and his wife Eileen, also an interior designer, decided to buy it themselves.

“It went on the market just when the market started to dip in 2007 and it was probably the only time I could have afforded to buy it,” he says. “The flat was designed for the market but it’s as close to anything I would design for myself.

“I would say it reflects Eileen’s [and my own personality. I think the exciting thing about this flat is that its large size forces you to play with scale. It is great to be able to make things one-and-a-half times their normal size. For example, with the giant, prototype, freestanding lamp, I designed the shade and had it made by a specialist in Edinburgh. I learnt to woodturn to make the base, which is made from more than 20 pieces of scrap builders’ timber.

“Scale is also reflected within the artwork throughout. All the paintings are my own work and it can usually take us months to decide on what artwork to place where. Only now, after living within the space for two years, are our ideas really developing. The apartment is modern, idiosyncratic and a direct reflection of both inhabitants.”

Solley admits that, in line with the rest of the country, market activity in Dundee did decline from mid-2008, but he reports the market has been performing well this year.

“The healthy aspect of it all is that properties are starting to sell right across the marketplace again,” he says.

Many high-quality properties in the city centre are developed from the mills and warehouses that defined Dundee in its industrial heyday.

Key among these projects is a £4m conversion of a landmark clock tower and another former jute warehouse into a complex of 12 waterfront properties over six floors. The architecture practice Archial, which received a Dundee Civic Trust award for its outstanding contribution to the city, restored and converted the Caithness-stone and cast-iron Clock Tower into two-and three-bedroom apartments and three duplex penthouses, with prices ranging from £295,000 to £535,000.

Tim Allan, director of Unicorn Property Group, the local developer responsible for the complex, which is in the former maritime quarter, is confident that targeting the top end of the market is a sensible move, even in today’s climate.

“It couldn’t have been a worse time to be a developer, but we’ve found that Dundee has been a robust market,” he says. “We’ve found valuations have held up at the waterfront, as it’s a good location and the properties are well priced. When we set up our development company in 2005, our decision to [be based in] Dundee was totally opportunistic as it was beginning to experience a lift in its demand for quality housing stock,” he adds.

“Places like Edinburgh and Glasgow and other post-industrial cities had all experienced their regeneration and we felt Dundee was on that arc of development. The city has a fairly vibrant economy, with two universities that are expanding and Ninewells, one of the largest and most important teaching hospitals in Europe. With the digital animation and bio-science industries, there are jobs coming into Dundee.

“It’s becoming one of the renewables hubs of the UK, and then there will be the new V&A, which is to be based at the waterfront, so you really have a city on an upward trajectory. And if you can’t make money selling houses in that market, you’re doing something wrong. So far, we’ve built around 280 flats and townhouses on the waterfront, and there are about 30 left.”

Allan says he is not worried about the Clock Tower properties that have yet to be snapped up. He feels sales have been hit by the stagnation of the secondary market, where potential buyers cannot offload their existing properties.

“Targeting the top end of the market is a stretch during a recession, but I’m relaxed [and feel] that the market will return,” he says.

Solley, too, is confident that buyers are out there. “People now want to live in apartments in the city,” he says. “The influence of new development in Dundee has lifted the marketplace and there is quality housing available in volume that wasn’t there before. Driving across the Tay bridge towards Dundee, the city bears little resemblance to what it was 20 years ago.

“The major change has been that people used to commute from Broughty Ferry and north Fife; it never occurred to them to live in Dundee itself. But now the inner city and immediate suburbs are where people want to stay. Apartment living is now sexy.”

Clock Tower: Thorntons, 01382 200 099, www.thorntons-law.co.uk; High Mill Court: Michael Dix, 07760 298913, 01382 521999

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