AEW Europe’s City Retail Fund has bought the former Scottish Stock Exchange building in Glasgow for £33m from Aberdeen Standard Investments.
It is the fund’s first acquisition in the UK and brings its portfolio to 21 assets across 10 cities, including Copenhagen, Dublin, Glasgow, Madrid, Milan and Paris, with a total value of more than €620m.
Located at 153-159 Buchanan Street and 6-11 Nelson Mandela Place, the 57,190 sq ft property, which is split into 24,920 sq ft of retail space and 22,704 sq ft of office space, is fully let to nine tenants.
The ground and first two floors of the property are anchored by The North Face and Urban Outfitters, which have been trading there since 2001.
The third and fourth floors are let to the Scottish Ministers, while the fifth floor comprises three smaller office suites.
Three further restaurant/leisure units on the ground and lower ground floors fronting on to Nelson Mandela Place are occupied by Subway, Carlsberg UK and Absurd Bird.
Spencer Corkin, director of investments at AEW, said: “This is one of the best retail assets in Scotland, reflecting our highly selective acquisition strategy in the UK.
“Buchanan Street is second only to London’s West End in terms of footfall and retail spend, yet it provides a significant prime yield margin. The micro location’s fundamentals remain particularly attractive with almost zero availability and robust occupier demand driving strong rental growth in recent years.”
Christina Ofschonka, fund manager for Europe city retail at AEW, added: “Through this acquisition we have added another high-quality asset to the fund portfolio, and we have a strong pipeline of further potential investments.
“Over the past 12 months we have expanded the breadth and depth of our investor base with new investors from Italy and the Netherlands, reflecting the strong appetite among institutions for this focused retail strategy.”
AEW was advised by Brodies and Cushman & Wakefield; Aberdeen Standard Investments was advised by Shepherd + Wedderburn and CBRE.
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