| scotland
GLASGOW’S METAMORPHOSIS G
lasgow’s riverfront regeneration commenced at Partick with the Glasgow Harbour development, some 4 miles from the city centre, in the year 2000. To most Glaswegians, the St Enoch Quarter would have been the obvious place to start with it’s location being at the bottom of the second busiest retail parade in the UK. Surely that section of the banks on the River Clyde would have been the place to create a vibrant
Malcolm Pearson
development focussing on
food, drink and the arts ? Wind forward 18 years and we are finally witnessing some action in the St Enoch Quarter: with completion due in August for Silk Group’s 17 storey 367 bed student scheme on Clyde Street, work has commenced on North Ltd’s 250 bed Premier Inn on Howard Street; Artisan have started the planning process for their 300 bed hotel development at Custom House/Dixon Street; Clyde Dixon Land and Property’s 156 bed hotel was recently consented on Dixon Street; and the former Riverside Club building on Clyde Street being acquired by Silk Group with a consented 106 bed hotel scheme. It is also understood that Glasgow City Council will be revealing their vision for Custom House Quay at MIPIM next week. Better late than never! Glasgow City Council have announced that they have £50M earmarked for the redevelopment of the quay walls which is key for the riverside regeneration. It is clear that this is badly needed, even on a dark night from the Waverley. This area will also benefit when Drum’s large mixed
use scheme in Tradeston gets underway. Glasgow has had problems attracting developers with the recession in 2008, the Scottish Referendum in 2014 (and the hanging threat of another one!) and the Brexit Referendum in 2016. For many developers it was viewed as 3rd choice behind Aberdeen and Edinburgh. That has changed and it is now viewed as a place that offers exceptionally good returns. Of course, the secret is buying at the right price and getting your build costs correct. A mix of high entry prices and rising build costs have seen a few developments either stall or being remarketed. The Study Inn student deal for the former College of Building and Printing and Charles Oakley House fell through after 2 years and is currently back on the market, as was the Student Castle student scheme on Cathedral Street. It is understood that costs have delayed the Chris Stewart mixed use development on George Square, the Formal Investment’s 240,000sqft office development on the BHS site on Bath Street and also the 400 bed hotel development on the NCP site on Ingram Street.
On the other side of the railway tracks from St Enoch, the International Financial Services District (IFSD) is also witnessing change. The 374 bed Motel One hotel is nearing completion; Westergate has been sold to Starwood for a 208 bed Yotel development; BAM have started on the 280,000sqft HMRC scheme at Atlantic Square; HF Developments will complete the 155,000sqft Morgan Stanley offices this year; Maven’s 137 bed Ibis Styles Hotel opens in the summer; and the former Jumeirah Hotel site on Argyle Street has been sold to Vanguard who plan to develop out 280,000 sq.ft of offices.
Although the student accommodation
market is on the wane a number of schemes are under construction at Townhead which has been transformed in
recent years: Soller Group, with a pre- commitment from The Royal Conservatoire of Scotland, have started their 301 bed development; Watkin Jones have completed a 440 bed scheme on North Hanover Street and have started a 400 bed development across the road; and the Raphael Property 420 development is under construction on St Mungo Avenue. As land values in the city centre have been pushed up by hotel, office and student demand developers have had to consider more peripheral locations for residential use. The traditional boundaries of the River Clyde, the High Street, the M8 and the Kingston Bridge are now being breached.
Glaswegians have heard much of the
new Build To Rent (BTR) sector and several large schemes are now progressing through the planning system: Modus - 450 units at Pitt Street; Platform – 400 units at Central Quay; Get Living - 600 units at Molendinar Street; and Inhabit – 345 units on Candleriggs. It is going to be interesting to see how successful this model is in a city where property purchase for young professionals is not out of reach, and rents are lower than other major UK cities. Accommodation for key workers, or
mid-market rent, and affordable homes are usually developed by Housing Associations but these tend to be of a smaller scale (under 100 units) in less prime locations. It is obvious that the private sector cannot make up the shortfall of housing delivery and the Government are not keen to develop council housing again. If local authorities are empowered to lease new developments there is demand from the pension funds. This would enable developers to compete with higher value uses and get people living back in the UK city centres and make big inroads into solving the housing crisis. Maybe that is too simple ?
Visit
www.pearson-property.co.uk JOINT LETTING AGENTS AT ST VINCENT PLAZA
rivate investment firm Starwood Capital Group has moved quickly to appoint joint letting agents at the landmark St Vincent Plaza office development in the heart of Glasgow. A Starwood Capital Group controlled affiliate acquired St Vincent Plaza from Abstract Securities in October and has appointed Lambert Smith Hampton and Ryden to let the remaining space at
P Aasia Mohammad 46
the striking 172,000 sq.ft modern office building located in the city’s central business district. Completed in late 2015, the St Vincent Street building offers economic running costs, energy efficiency and highly flexible floor space and has already proved a hit with a host of high-profile tenants including KPMG, Whyte & Mackay, and Wood Group. The most recent addition to that mix
has been Zurich Insurance, which has taken the entire 7th floor at St Vincent Plaza in a deal completed shortly after the investment transaction. Aasia Mohammad, Director, – Business
Space, Glasgow, LSH commented: “St Vincent Plaza is already 84% let, but there is still around 27,000 sq.ft of grade A accommodation available on the first and part ground floors. “With the current dearth in prime office space in Glasgow, we believe St Vincent Plaza offers some of the last remaining and best grade A stock in the city. Given its landmark location, superb modern facilities and eye-catching array of existing tenants, we believe there will be strong demand for the remaining space.”
COMMERCIAL PROPERTY MONTHLY 2018
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