| scotland
IN MY VIEW S
by John Rae, Head of Knight Frank Glasgow
upply rather than demand was the reason for low prime office investment volumes in 2015/16, says John Rae, Head of Knight Frank Glasgow.
In 2015 and 2016, Glasgow saw low investment volumes at the prime end of the office market. The question was whether this was due to a lack of demand or a lack of suitable buildings. Now we
have the answer - the last few
months have clearly shown that when the right
developments are available, Glasgow is very popular with investors.
John Rae The deals at 122
Waterloo Street, St. Vincent Plaza and Legal and General’s funding of the new Government Property Unit hub at Atlantic
WESTWAY PARK
anmoor has completed the acquisition of Scotland’s largest fully enclosed Industrial park for £40m and plans to make a substantial investment to breathe new life into the area. The 135 acre self-contained site is home to numerous national and international businesses including Doosan Babcock, the highly skilled engineering firm.
C Tom White, director at Canmoor, said:
“We are delighted to complete the acquisition of Westway Park and are excited to be part of the next phase of its development. We intend to work closely with current and new occupiers to deliver fit for purpose warehouse, manufacturing and business space. The existing buildings have real rarity value through their high eaves, heavy cranage and large power capacity and through our refurbishment programme we aim to take advantage of these attributes, to attract new occupiers. “We are also excited that Westway
Park will play a key part of the Renfrewshire City Deal Project, including the recently announced National Manufacturing Institute for Scotland and the development of a new bridge over the River Cart, linking Westway with Glasgow Airport. This marks the start of an exciting new chapter’’.
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Square have amounted to £250 million in transactions, from investors in the Far East, the US and the UK. Knight Frank Glasgow acted on behalf of the buyer in the transactions above. In the case of 122 Waterloo Street, Knight Frank Investment Management acted on behalf of Korean investors, when they made their Scottish debut with the purchase of new Morgan Stanley HQ. This remains a state of the art Grade A development for HFD Group, and will provide 10 years of income for the investor.
For 1 Atlantic Square, we acted on behalf of Legal & General on the forward funding of BAM’s 180,000 sq.ft development, which secured the GPU requirement on a 20 year lease. This is the latest in a series of government occupiers, who have secured space in the Broomielaw area, alongside the DWP and Scottish Courts at Atlantic Quay.
Glasgow now has an acute shortage of Grade A office space, and we firmly believe that we will see real rental growth in the short to medium term, which will heighten the demand for office investment in Glasgow.
PUBLIC SECTOR PROPELS OFFICE TAKE-UP
Glasgow in 2017 was by the public sector, following two major Government Property Unit deals at the end of the year.
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GVA’s latest Big Nine report shows that in the final quarter of 2017, which was the busiest of the year for Glasgow, both the Department of Work and Pensions and the Scottish Courts and Tribunals Service took circa 80,000 sq.ft. each at Atlantic Quay. This meant 45% of activity in the city came from the public sector, with a further 45% from professional and financial service sectors. Paul Broad, Business Space Director
for GVA in Glasgow, said: “It was an encouraging finish to the year, as many of these major deals had slipped from Q3 to Q4. Now, with a number of refurbishment schemes completing and the potential for speculative development to return to the Glasgow city centre market, all eyes are on occupier requirements and which occupiers will take the opportunity to take ‘first mover advantage’ and secure the best opportunities. 2018 promises to be very interesting.”
ew figures have revealed almost half of all transactions for office space in
Atlantic Quay 3, the central Glasgow Scottish court and tribunal building, from the Moorfield Group for £50 million. Legal & General has bought the asset on behalf of its LPI (Limited Price Inflation) Income Property Fund (the “Fund”) bringing its investment portfolio to £1.1 billion. Atlantic Quay 3 is a 79,500 sq.ft Grade A modern office building. It is fully let on a 25-year lease to the Scottish Courts and Tribunals Service. Based in the heart of Glasgow’s International Financial Services District, the property sits in a prime riverside location and is just a short walk from Glasgow’s main shopping, leisure and entertainment districts, as well as accessible to all major road, rail, air and bus links. The Atlantic Quay area has recently added some significant new occupiers, including the Government Property Unit’s selection of Atlantic Square for a 300,000 sq.ft regional hub. Legal & General was represented by Savills and Addleshaw Goddard on this deal.
COURT SNAPPED UP L
GIM Real Assets (Legal & General) announces that it has acquired
INDUSTRIAL UNIT LEASED IN GLASGOW
A
n industrial unit with trade counter consent at 7 Robert Drive, in the Govan area of Glasgow, has been sold at closing date to a private investor by DM Hall for a sum of £523,000, well in excess of the asking price of £440,000.
The modern semi-detached 9,100 sq.ft property which is let to Edmundson Electrical Ltd, trading as A&D Cartwright, until 2023 currently has a passing rent of £38,000.
Alister Gibson and Graeme Todd of DM Hall, who successfully sold the property, said: “The number of bids received and the achieved price, reflecting a net initial yield of 6.96%, provides an indication that there is a strong appetite in Glasgow for investments of this kind. “The tenant’s strong covenant and the location of the property in a recognised and busy trading estate are all factors which are reflected in the price paid. “There is buoyancy in the market to acquire the heritable interest of Glasgow industrial units in the right location since they only occasionally come only to the market.”
COMMERCIAL PROPERTY MONTHLY 2018 GLASGOW LAW
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