THE appeal of prime commercial property in Glasgow among overseas investors has been underlined by the multi-million-pound sale one of the city’s most prominent office buildings.

Bank of London and The Middle East (BLME) has acquired Atlantic Quay 1 – a Grade A office block overlooking the River Clyde in the city’s International Financial Services District - for £55 million.

It comes amid increasing signs that overseas investors are seeing healthy returns in the Glasgow office market, despite Brexit uncertainty, with demand for high-quality accommodation outstripping supply.

The recently-refurbished Atlantic Quay 1 is primarily let to the Department of Work and Pensions, with the government body accounting for 80 per cent of the building’s rental income. Fellow tenant Mactaggart & Mickel, the Scottish housebuilder, accounts for the balance of the income.

London-based BLME is Sharia-compliant, and describes itself as the largest wholly Islamic Bank in Europe. It identifies and co-invests in real estate alongside professional investors from the Middle East.

The bank has acquired the 121,737 sq fit Atlantic Quay 1 from MREFIII, a fund managed by Moorfield Group, signalling its first commercial property investment in Glasgow. However last month the bank revealed it had provided funding for city-based Carrick Asset Finance, which provides asset finance to SMEs (small and medium-sized enterprises) around the UK.

Investors who work with the institution are understood to have a strong appetite for investing in UK real estate. Deals in the UK have taken on further appeal as a consequence of sterling’s weakness since the Brexit vote in June 2016.

Khaled Alanani, investment manager for BLME Investment Solutions, said: “AQ1 (Atlantic Quay 1) fits within our real estate investment strategy of acquiring income generating assets anchored by investment grade tenants.

“The prime location within one of the UK’s most vibrant cities and Scotland’s economic powerhouse will provide our clients with stable income and potential for rental growth and capital appreciation.”

READ MORE: Legal & General seals £50m deal for Atlantic Quay 3

Moorfield acquired Atlantic Quay 1,2 and 3, which between them span 280,000 sq ft of office space, for around £60m in 2015, with Glasgow-based Resonance Capital coming on board as an investor and asset manager. Atlantic Quay 3 was sold to Legal & General for £50m in December 2016, while building 2 remains part of the Moorfield and Resonance portfolio.

Charles Ferguson Davie, chief investment officer at Moorfield Group, said: “We identified the Atlantic Quay buildings as high quality offices at the heart of Glasgow’s International Financial Services District, in a prime riverside location and in an office market starved of new space.

“They were ready for refurbishment when we purchased them in September 2015 and we are proud to have developed such a successful scheme with Resonance Capital.”

The BLME investment comes amid surging investment in new office space in Glasgow city centre. Last week, Osborne & Co, also backed by Middle East-based investors, submitted a detailed planning application for the construction of massive speculative office development on Argyle Street.

Banking giant Barclays is developing a new campus at the city’s Buchanan Wharf, where it plans to create up to 2,500 new jobs.

Darin Partners will act as asset manager of Atlantic Quay 1 for BLME. Its chief executive, David Bell, said: “Atlantic Quay provides our client with long term government income, with the opportunity to drive capital appreciation through asset management.

“We are very confident in the Glasgow occupational market, with tenant demand outstripping the level of supply, which will result in short and medium term rental growth.”