Quadrant Estates and KKR have sold The Sauchiehall Building in Glasgow to Saudi-based investor Arbah Capital, fronted by James Caan’s 90 North Group.
The high street retail, leisure and car park scheme, located on Sauchiehall Street and Bath Street, was sold for £55m. This reflected a 6.3% net initial yield.
Montagu Evans initially marketed the block on behalf of the joint venture for £60.6m for shares in a Luxembourg special purpose vehicle, net of debt, at a 6% yield.
The high street property ultimately sold at a premium to purchase price, having initially been bought in 2015 for around £46.5m at a 7% yield. Its principal tenants include Primark, TK Maxx, Sports Direct and a multi-storey car park.
It is understood that the value of the building was boosted after a number of leases were regeared. The site has an average WAULT of 16.8 years to expiry, with 15.8 years to break options.
Units were also refurbished and taken up by Greggs and US chain Smashburger.
Arbah is not a stranger to the UK market, after it provided a mezzanine financing facility of up to £50m to the Regent’s Crescent resi development in central London last year, among a consortium of lenders.
However, the Sauchiehall deal is thought to be its first major real estate purchase outside of its domestic market.
Mahmood Al Kooheji, chief executive of Dannam-headquartered Arbah Capital, said: “The Sauchiehall acquisition focuses on attaining value at a time of uncertainty in the UK, buying a core asset in a prime location at an attractive cap rate.
“Glasgow City Council is planning to invest £115m into the retail district via The Avenues concept to transform the retail visitor experience, by offering continuous footways, enhanced street lighting, overall improved landscapes, additional segregated cycling routes, and an ultimate shopping destination. This will serve to enhance property values in Sauchiehall Street.”
JLL advised 90 North on its acquisition.
To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette
