The Clydebuilt Limited Partnership joint venture between Scottish property company Ediston and Strathclyde Pension Fund has acquired a “fully city block” on Argyle Street in Glasgow for £13 million, and revealed interest in the upper floors from hotel operators.
The block, at 167 to 205 Argyle Street, has been acquired from real estate group Toscaig in an off-market transaction, with the price reflecting a net initial yield of slightly more than 12%.
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Highlighting opportunities to improve the “income profile” of the block, Ediston said: “There is…60,000 sq ft of vacant accommodation over the upper second, third and fourth floors. The property affords asset management opportunities to improve the existing income profile and current WAULT (weighted average unexpired lease term) of 5.7 years. There is already strong interest in the upper floors, most notably from hotel and aparthotel operators.”
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Existing tenants include Sainsburys, Poundland, Bank of Scotland, Card Factory, Blacks, Pizza Hut and The Gym, producing a core annual income of £1.66m.
Ediston said: “The property is well let and comprises a full 'city block' between Buchanan Street and Jamaica Street, a busy and prominent location adjacent to the entrance to St Enoch Centre and in close proximity to Central Station.”
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The Scottish property company noted the acquisition represented the second purchase under its "new phase of investment" on behalf of the Clydebuilt platform.
Ediston said this Clydebuilt joint venture “has a further £135m to deploy and is actively seeking new opportunities across all sectors in Glasgow and the surrounding former Strathclyde region”.
It added: “That includes value-add investments and development sites with or without planning consent and Clydebuilt will also consider joint venture, funding and partnership solutions, encompassing regeneration opportunities, within the portfolio.”
Danny O’Neill, chief executive of Ediston and general partner for Clydebuilt LP, said: “The purchase of this asset in a difficult market where good stock is scarce is testament to Clydebuilt’s track record of concluding deals.
"Whilst the mandate has a wide geographical coverage across the former Strathclyde Region, our main focus is to deploy capital in Glasgow city centre where we are starting to see value and where there is occupier demand not only for retail, but for alternative uses."
He added: “This asset fits that criteria perfectly and I believe the pitch will continue to improve as retailers seek new stores with the potential repurposing of Buchanan Galleries. Next’s acquisition of the former Topshop unit on Argyle Street is testament to that.”
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