Lothbury Investment Management has sold a mixed-use Glasgow building for £31m to Pontegadea, owned by Spanish retail billionaire and Zara owner Amancio Ortega.
The building covers 35,000 sq ft and includes 78-90 Buchanan Street and 9-17 Exchange Place, which provide a mix of shops, leisure units and offices. It produces annual rental income of £1.3m.
The site occupies a corner plot and Exchange Place runs along the side of the building.
Tenants at 78-90 Buchanan Street include Vodafone, Lush and Starbucks, as well as Building Design Partnerships, BNP Paribas Real Estate and Drum Property Group.
The weighted average lease term is 8.8 years.
CBRE acted for Lothbury; Sheridan Property Consultants acted for Pontegadea.
Last year, Pontegadea also acquired the Apple store in Glasgow from UK investment company Royal London for in excess of £48m – more than £7m above the asking price.
Mike Toft, senior fund manager and executive director of Lothbury Investment Management, said: “Buchanan Street was purchased out of administration for £17.4m.
“It was a key purchase as it fitted our strategy of investing in prime locations with excellent growth potential. Indeed, rental growth has remained good despite the downturn in retail, with rents rising from £260 to £320 per sq ft in just three years.
“However, with the challenges now facing the retail sector, this was a good opportunity to sell and reinvest in other areas, particularly the industrial and alternative sectors. The disposal is in line with our strategy of selectively reducing the fund’s exposure to high street retail.”
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