A private Irish investor’s £51.5m acquisition of Scarborough Development Group’s 110 St Vincent Street will set a new benchmark yield for Glasgow.
The unnamed investor put the 94,000 sq ft office under offer before Christmas at a 4.49% yield.
The sharpest yield achieved prior to this was 4.66% on Walker Group’s sale of 200 Broomielaw to F&C in June last year.
The development was put up for sale in October last year, following a record letting to banking giant HBOS in August.
HBOS has taken a 15-year lease at a rent of £26 per sq ft for the majority of the space, and £27 per sq ft on the seventh floor.
Despite the record yield, several agents had been predicting the scheme would achieve a 4.25% yield because of the nature of the covenant.
One investment agent said: “This is the lowest yield paid for an office in Glasgow but it’s surprising it’s not sharper. However, it is a listed facade and is under construction, meaning there is an element of risk.”
CB Richard Ellis and GVA Grimley are advising Scarborough.
References: EGi News 08/01/07
