A GLASGOW site once earmarked to host Scotland’s first six-star hotel will be developed into one of the city’s biggest office blocks under plans unveiled today.
A joint venture between a Middle East-based real estate developer and property investor Jim Kelly is proposing to build a 280,000 square foot office on Argyle Street, at the heart of the city’s growing International Financial Services District (IFSD).
The details emerged amid continuing concern over the dearth of Grade A office space in the city. The proposals would mark the first speculative office development in Glasgow since the launch of the 172,280 sq ft St Vincent Plaza in 2015. It is expected that the proposed building would house up 4,000 staff.
Analysis: Argyle Street bid to boost Grade A office space
The site, which sits between Robertson Street and York Street, was earmarked several years ago as the location for a luxury hotel by Dubai-based Jumeirah. However, those plans ultimately foundered in 2011 when its developer, BLN Property Developments, went into administration.
That scheme was also at the centre of a public row because existing tenants at the site, including a pawnbroker and a Chinese restaurant, refused to sell their premises to the developer.
However, Vanguard Real Estate, the joint venture behind the new plans, will not face those challenges. Vanguard has acquired the site from a Singapore firm led by Shazad Bakhsh, a Glasgow businessman once linked with a bid to buy Rangers when the club was in administration in 2012. Mr Bakhsh heads the Glasgow operation of Scotsbridge, which bought out all existing tenants and other parts of the site before selling the package to Vanguard. Mr Bakhsh has taken a minority shareholding in the site.
The key players behind Vanguard have a strong track record in international property development. Abu Dhabi-based Gulf Resources Development & Investment has delivered projects worth around £1 billion in total across four continents, including a 900,000 sq ft office building for Citigroup in Manilla. Mr Kelly, who has invested in Vanguard in a personal capacity, is the former owner principal of St Francis Property Group, which has a “legacy” portfolio worth around £500m. This includes site works for HSBC’s new office and Paradise Circus in Birmingham.
Vanguard has already delivered a 1.1m sq ft distribution centre for IKEA in Dubai, and recently acquired the Sirocco Works site in Belfast, a 1.6m sq ft mixed-used development. The Belfast project, which is currently going through the planning process, is believed to be one of the biggest urban renewal projects in the UK.
Analysis: Argyle Street bid to boost Grade A office space
The level of investment Vanguard is making in the Argyle Street site has not been disclosed. However, it is estimated that the building, when complete, will have a gross development value in the region of £100m.
Vanguard is aiming to submit a full planning application to the city council in the spring, having appointed Glasgow-based architect Cooper Cromar to progress its plans. It confirmed a pre-application community consultation is now underway through a Proposal of Application Notice, which will feature public exhibitions at the nearby Radisson Blu Hotel on Argyle Street today and on March 15. The development team is currently carrying out economic and historic environment studies on the site.
Vanguard director Conor Osborne said: “We believe this is one of the best undeveloped opportunities in Scotland - and are looking forward to working with the council to deliver a forward-thinking office scheme.”
He added: “Glasgow continues to suffer from a lack of Grade A supply with strong demand from occupiers for new space, and we are confident the development will attract a strong line-up of tenants, bringing new jobs to the city in the process.”
Analysis: Argyle Street bid to boost Grade A office space
Stuart Patrick, chief executive of Glasgow Chamber of Commerce, said: “It’s tremendous to see a derelict site being repurposed for new use, helping to tackle a shortfall in the market for genuine Grade A space. Such a major project, stemming from significant inward investment, is a huge benefit to the city’s economy but also testament to its strength.”
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