CS Euroreal, the €6bn (£4.3bn) German property fund being wound up by Credit Suisse, is close to offloading one of its final UK assets with the sale of Glasgow’s Aurora Building.
M&G Real Estate is on the cusp of completing an off-market deal to buy the 174,000 sq ft office block at 120 Bothwell Street for £70m – a 6.25% yield.
The deal reflects a significant bet on the Glasgow office market by the UK institution, with the building’s largest tenant, Barclays, yet to commit to remaining in the building beyond a 2017 break option in its lease.
Barclays occupies 94,875 sq ft over five floors and pays rent of £26 per sq ft.
However, given the relatively tight window for a move ahead of its upcoming break, the bank is widely expected to stay put.
The fund is thought to have attempted to secure a regear with the bank before engaging with potential purchasers.
CS Euroreal’s sale of the building – which it bought at the peak of the market in 2007 for £92m – has long been anticipated given its on-going five year liquidation process, which began in 2012.
Credit Suisse confirmed in 2012 that it would liquidate the German mutual fund following a surge of redemption requests from investors.
At its peak CS Euroreal owned 12 UK properties, including London trophies Plantation Place South (pictured) and 55 Mark Lane, both EC3, and the St Katherine Estate, E1.
The London buildings have now been sold, along with major regional office blocks such as 3 Hardman Square in Manchester, which was bought by M&G in January for £91.7m.
The fund’s remaining assets include 4 and 6 Atlantic Quay in Glasgow.
Nick Penny, director of investment at Savills, said: “This deal shows the strength of the market for good-quality product and shows that there is still strong investment demand for stock in Scotland.”
Knight Frank advised CS Euroreal; JLL advised M&G.
amber.rolt@estatesgazezzet.com
