Nothing top secret about Bonds' rental cost

Published on Monday 26 April 2010 19:01

FOLLOWING my concentration last week on the current tendency to keep quiet about the financial details of office lettings comes news of a landlord whose strategy – in respect of one Edinburgh development at least, is a complete reversal of this trend by positively emphasising the cut-price rental rates on offer.

The letting team acting for Highcross on Sugar Bond and Bonnington Bond in Leith have started quoting a "remarkable" 7.50 a square foot for the refurbished offices in both buildings and is "making it clear that market incentives will also be available to in-going tenants".

Self-employed consultant Craig Watson, who has recently joined Ryden and Montagu Evans as a joint agent on the properties said, however, that "this type of deal cannot last forever, as I am sure that in a matter of months the market will begin to improve in favour of landlords".

This may sound like a bit of bravado but if space in a development of this refurbished quality cannot be shifted at this sort of price then Private Fraser was right – we really are doomed.

A former refinery and bonded warehouse respectively, the two buildings were converted to office accommodation in the early 1990s, when Leith was being promoted as Edinburgh's alternative "boutique" office quarter. Sugar Bond currently has floors available at around 2,500sq ft and Bonnington Bond four suites of around 6,000sq ft, with potential subdivisions of 950sq ft upward. The total letting area for Bonnington Bond is 24,000sq ft-plus and for Sugar Bond, 17,000sq ft-plus.

Meanwhile, less than a mile away, on McDonald Road, the finishing touches are being put to Bridgeside House – claimed by its letting agents to be the only office new-build that will complete in Edinburgh this year.

Work on Bridgeside House was begun approximately 15 months ago by the long-established Edinburgh-based developer, J Smart & Co. The scheme involves just under 24,000sq ft of open-plan accommodation behind a retained sandstone and glazed facade, with new glass curtain walling to the rear. Previously this had been the frontage of the Hunter & Foulis printworks, which occupied the site from 1935 until the firm's relocation to Haddington in 2001.

The accommodation is set over three floors and includes a 1,839sq ft townhouse, which has its own main door and, therefore, can be let separately or integrated with the main accommodation. Underground car parking at an approximate ratio of one to every 1,000sq ft is provided, plus surface visitor parking. Leith Walk, with its myriad bus routes (and, eventually, a tram line) is a third of a mile away.

However, there is none of the "cards on the table" attitude relating to occupier cost as at the aforementioned bonds. Despite the, shall we say, "challenging" nature of the current market, letting agent Mark Jones of DTZ (joint with DM Hall) declined to quote any head rental rate, saying only that any figure would be "appropriate to the location and the quality of the development". However, making an informed guess, someone thinking in terms of 15 to 16 a sq ft might not be too far wide of the mark.

Lift in public sector leases

GVA Grimley has announced a hat-trick of flexible public sector-related lease arrangements in Glasgow and Lanarkshire. The Scottish Government has acquired 900sq ft at Stock Exchange House, Nelson Mandela Place, Glasgow on a short term basis, paying 11.28 a sq ft and receiving a high-quality fit-out from the head tenant, Odgers, which was represented by Phil Reid Associates.

The two other deals were on behalf of Telereal Trillium; one is a lease of the second floor of 1 Barrack Street, Hamilton extending to approximately 4,534sq ft on a two-year lease at 33,750 per annum, while the other is a four-year lease of refurbished offices at the ground floor of Stirling House, Airdrie at 32,500 per annum. In both cases the space has been sub-let to the Department of Work and Pensions.

THE Works is the latest tenant to sign up to the Antonine Centre in Cumbernauld, having agreed to take a 2,618sq ft unit on a ten-year lease at an initial rental of 45,000 per annum including five months rent free. Ross Wilkie of joint letting agent Cushman & Wakefield said: "The Works has been steadily securing sites at major shopping locations throughout the UK and the Antonine Centre meets the company's ideal location and demographic profile."

WORKING Links has expanded from its existing premises in the Oak Mall Centre in Greenock, where it has taken 2,921sq ft at 17-19 Clyde Square at a rental of 34,000 per annum on a five-year lease with three months rent free. Eric Young & Co and Cushman & Wakefield acted for the landlord and Marchmont Surveyors for Working Links.

ON BEHALF of a private landlord, Ryden has sold a 2,077sq ft retail unit at 4-6 North Bank Street on the Mound in Edinburgh to another private investor for circa 500,000.