Agents pick the most significant deals
(for the six months to end of October)
29 Drumsheugh Gardens, Edinburgh
Type of deal Office freehold sale
Vendor Edinburgh Airport
Purchaser Westerwood
Size 6,413 sq ft
Price £1.265m
Chosen by Peter Fraser, associate director, GVA James Barr
The sale of 29 Drumsheugh Gardens, which is likely to revert back to residential from office use, is significant as it is not just a fantastic building and development opportunity, but also part of the ongoing evolution of the Edinburgh market. There is a lack of grade-A stock in central Edinburgh and with 78% of all deals being sub-5,000 sq ft, the trend of converting smaller, cheaper office buildings to alternative uses is putting pressure on the market.
This sale is not the largest deal this year, but I consider it to have a number of important implications. It marks a shift back to residential in some areas of the city, such as Edinburgh’s west end, which is good for the hard-pressed housing market. However, it also reduces office stock levels. While this will lead to greater competition for city centre space, it could encourage occupiers to consider other locations such as West Edinburgh and Leith.
Michael Kors, Union Square, Aberdeen
Type of deal Letting
Landlord Hammerson
Tenant Michael Kors
Size 2,500 sq ft
Rent Undisclosed
Chosen by James Godfrey, partner, Culverwell
My choice of top deal is the letting to Michael Kors at Union Square in Aberdeen which I believe to be a great addition to the centre and one which further strengthens its line-up of luxury retailers. Due to high tenant demand for Union Square, and with only one available unit, terms with the retailer were also agreed at a strong market rent.
This was only the second acquisition for Michael Kors in Scotland, after Edinburgh. Recognised as a premium fashion retailer, securing it in a shopping centre in Aberdeen is significant in terms of what it says about the reputation of the city. This letting also reflects Hammerson’s tenant mix vision for the centre and reinforces Aberdeen’s credentials as a successful location for UK and international retailers. It also confirms that there is clear demand for more space in Union Square and, therefore, supports Hammerson’s recent decision to look at extending the centre.
Buildings 1, 2 and 3 Atlantic Quay, Glasgow
Type of deal Investment
Vendor M&G Real Estate
Purchaser Moorfield Real Estate Fund III
Size 280,000 sq ft
Price £60.7m
Yield 8.54%
Chosen by Ian Dougherty, partner, Ryden
The acquisition of 1, 2 and 3 Atlantic Quay provided a unique opportunity for an investor to secure a city centre waterfront estate within the heart of Glasgow’s international financial services district. With two of the buildings also subject to lease expiries in 2016/17, potentially bringing up to 210,000 sq ft back to the market, the asset required a buyer with the ability to formulate and implement a comprehensive refurbishment and letting strategy to reposition it back into the institutional market.
Moorfield Group, working with its joint venture partner Resonance Capital, saw the opportunity through an analysis of the development programme in the city centre which identified a gap in completions within which refurbished offices at Atlantic Quay could be released back into the market. In general terms, I believe this deal also demonstrates the confidence investors have in the Glasgow office market, driven by a combination of recent, strong occupational take-up and reducing grade-A supply.
People, planning and peculiarities
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On the move
There are new faces at several agencies. Savills has boosted its team with two staff joining from FG Burnett – Stuart Orr in investment and Ross Sinclair joining business space agency. Lambert Smith Hampton, which plans to double in size in Scotland and is moving to a new Glasgow HQ at Bothwell Street, has taken on Craig Maguire as its new head of Scotland. Ross Wilkie has left Cushman & Wakefield to join Colliers retail agency; while at CBRE Chris Humphrey is settling in as director in retail, re-joining the firm after a decade at Colliers.
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Ryden’s glitzy night
Ryden mingled with the stars at the recent Scottish Business Awards, having been nominated for Sunday Times SME of the Year. Staff enjoyed a glittering evening at the Edinburgh International Conference Centre, which saw George Clooney interviewed on stage by Chris Evans, speeches by Sir Chris Hoy and Judy Murray and presentations by Rob Brydon. Ryden didn’t come away with an award, but said it was chuffed to be part of it all.
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Taking it to the bridge
Glasgow’s once infamous “Bridge to Nowhere” now has a purpose. The bridge, designed to link Anderston to the city centre, hung suspended over a hotel car park when the project failed. But the community rallied round and, with a mix of funding, it was completed. It has now also scooped a national Sustrans award for “best community impact”.
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Newhaven on the line
Edinburgh city council transport chiefs struggled mightily with the long, painful and costly process of establishing a tram network. But, undeterred, the authority is discussing the first stage of an extension to Newhaven.
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Ribbon development
A new luxury hotel, designed by Jestico + Whiles to resemble a bundle of coiled ribbons and consented as part of TH Real Estate’s St James redevelopment in Edinburgh is attracting attention. The scheme has caused controversy due to its avant garde design in an historic part of the city. TH Real Estate, however, has told press it is “an exciting piece of modern architecture that makes a bold statement”.
Going up
Commercial property transactions in Aberdeen reached £201m in Q2 2015 – a three-year high. Registers of Scotland data, analysed by the Scottish Property Federation, revealed an overall uplift across the country.
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Edinburgh’s big hitters
In Edinburgh, the council put a £100m price tag on the sale of the 202,000 sq ft Atria, while Standard Life began marketing its 190,000 sq ft headquarters on Lothian Road for £91m.
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Student double
Select Property Group secured planning for its mixed-use 261-bed student scheme at Fountainbridge, Edinburgh, while Salmon Harvester Properties submitted plans for a 132-bed student scheme in Glasgow.
Glasgow city council launched a new development site – the 87,000 sq ft Strathclyde House, which it believes suitable for residential, hotel or office space.
Going down
Edinburgh council found itself in the middle of a battle over plans to redevelop the city’s former Royal High School into a luxury hotel – supporters saying proposals would bring it back to life while opponents felt they could destroy its character.
EG gauges the trials and tribulations of the Scottish property market
