A capital idea that may cause problems

Published on Monday 5 July 2010 15:11

IT IS no secret that the Glasgow office of BNP Paribas Real Estate faces the prospect of closure and its operation integrated with that of Edinburgh, where a 21-strong team is housed.

Should the outcome be as expected, it raises the question as to how adequately a firm of property advisers can serve the Glasgow market from Edinburgh - or vice versa - given that there are few cities in Europe so geographically so close but in many other aspects so far apart.

Perceived social differences - such as salt and vinegar with chips in Glasgow but salt and sauce in Edinburgh, or that a soft drink is "ginger" in the former but "juice" in the latter - can be laughed off but there is also a more serious commercial gap, which is why so many of the "national" (i.e. UK) property agencies - among them Jones Lang, CBRE, DTZ, Knight Frank, etc - all have a permanent presence in both.

To gauge opinion on the issue I spoke with several Scottish managing partners of firms that are represented in both cities, including David Davidson of Cushman & Wakefield, who said there were elements of business that were not geographically sensitive; for example, a management role in one city could be carried out from an office in the other,.

"Retail is another example," he continued. "Although we do have an office in Edinburgh, our physical presence is not essential to winning new retail business and servicing existing retail clients in the capital."

But offices and capital markets were another matter. Mr Davidson continued: "Quiet frankly, you really do need to have an office in both cities to operate successfully in these sectors; we struggled to get into capital markets in Edinburgh before opening our office there back in 1999.

"The investment split between the two cities is substantial; Edinburgh has a heavy institutional bias whereas in Glasgow the emphasis is more on a strong private developer and investor community."

And while twin offices were not essential in every respect, "having a local presence gives you a better chance of reacting quickly to any event in the local market", Mr Davidson added.

These sentiments were largely shared by Chris McFarlane, managing partner for Scotland at King Sturge. He said: "Some see Scotland as a single property centre but my personal opinion is that you do require a credible agency and investment presence in both cities, because Glasgow and Edinburgh are different markets in several respects. The north of England is similar; it is better to have offices in Manchester and Leeds than to service the entire region from one or the other.

Glasgow office block sold for $9.5m

Corunna House 1 in Glasgow has been sold to PRUPIM for 9.5 million by Michael Leahy Jnr, The is 52,492sq ft building is wholly let to Trillum Property GP until 31 March 2020, generating a rental income of 712,500 per annum. The yield was 7.5 per cent. Knight Frank acted for the vendor and Gilfillan Paterson for PRUPIM.

Ryden has acquired the a multi-let industrial investment at Brand Street, Glasgow for a private client, the price of 1.3m reflecting a net initial yield of 9.8pc. The 18,500sq ft industrial estate is located on the south side of the Clyde, close to Pacific Quay. It comprises 18 units, all of them let to a number of tenants, and produces an annual rental of 135,080 per annum. DM Hall acted for the private vendor.

Meanwhile in Aberdeen, Ryden has acquired an industrial unit at Altens for a private client of Chancerygate Asset Management, for 1.95m, reflecting a net initial yield of 8pc. The premises comprise 17,430sq ft of warehouse accommodation, 3,505sq ft of office space and an external storage yard and is let to tube and pipeline specialists Marla Tube Fittings until October 2020 and produces a rental of 165,000 per annum. Mark Halliday & Co acted for the vendor, Drum Property Group.

The first of four recently refurbished office suites at Gemini House in the town centre of Falkirk has been let to Newcross Healthcare Solutions on a five year lease. The new tenant, which will occupy the 676sq ft of space at a rental of 12.20 a sq ft. D M Hall acted for the landlord, Fraser Fyfe Investments.

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Karen Campbell departure amicable

Whenever someone leaves a top job "to pursue other interests", it usually leads to the inevitable follow-up question: "Did he go or was he pushed?"

In the case of Karen Campbell, departing chief executive of TAL CPT Land Development, the company behind the 750,000 sq ft Maxim Office Park at Eurocentral in Lanarkshire, she was definitely not pushed, the chairman, David Hunter, insisted shortly after the announcement of her intended move to London.

He explained: "I wish to emphasise absolutely that Karen's decision to resign was entirely of her own free will. We most certainly did not want her to go but she is very excited about pursuing other commercial property opportunities in London so it would not be appropriate to stand in her way.

"I worked closely with Karen and have a deep respect for the professional way she handled the role. Taking it on was a huge challenge, which she rose to admirably."

Mrs Campbell made her name as a highly successful business space agent in the Glasgow office of Montagu Evans and TAC must have been impressed by her record of securing tenants for space of varying dimensions and quality. Unfortunately, the appointment, almost three years ago, coincided with the start of the biggest property recession in at least a generation and her hopes of filling up the UK's largest speculative office development were not realised - although David Hunter insists she has paved the way for anticipated new business when the market recovers.

"However, you do get areas of professional expertise that are not bound up in geography."

One other distinct advantage of local offices, he added, was the frequency of personal contact with other property professionals and by gaining important snippets of information either through formal meetings or "just bumping in" to someone in the street.

BNP Paribas Real Estate - an arm of the major French Bank, BNP Paribas - came to prominence in UK commercial property agency circles in 2006 when, trading under Atisreal, it completed the 20 million takeover of Fuller Peiser.