Breaking: Major Glasgow city centre building sold for £33m

The building that once housed the Scottish Stock Exchange in Glasgow has changed hands in a major £33 million property investment deal.

The acquisition of the building at the corner of Buchanan Street and Nelson Mandela Place also marks AEW Europe City Retail Fund’s first acquisition in the UK. It has bought the site from Aberdeen Standard Investments.

The landmark city centre property is fully let to nine tenants. The ground and first two floors are anchored by North Face and Urban Outfitters, which have been trading there since 2001.

The third and fourth floors are let to the Scottish arm of the NHS, while the fifth floor comprises three smaller office suites.

Three further restaurant and leisure units on the ground and lower ground floors fronting onto Nelson Mandela Place are occupied by Subway, Carlsberg UK and Absurd Bird.

The five-storey building, which is adjacent to Glasgow’s Apple store, is positioned in the heart of the city’s shopping district known as the “Style Mile” with the retail frontage on Buchanan Street.

AEW said the acquisition provided it with ownership of “one of the most significant and well-positioned retail sites in Scotland”.

Spencer Corkin, director of investments, said: “This is one of the best retail assets in Scotland, reflecting our highly selective acquisition strategy in the UK.

“Buchanan Street is second only to London’s West End in terms of footfall and retail spend, yet it provides a significant prime yield margin. The micro location’s fundamentals remain particularly attractive with almost zero availability and robust occupier demand driving strong rental growth in recent years.”

Christina Ofschonka, fund manager at Europe City Retail, added: “Through this acquisition we have added another high quality asset to the fund portfolio and we have a strong pipeline of further potential investments.

“Over the last 12 months we have expanded the breadth and depth of our investor base with new investors from Italy and the Netherlands, reflecting the strong appetite among institutions for this focused retail strategy.”

AEW was advised by Brodies and Cushman & Wakefield while Aberdeen Standard Investments was advised by Shepherd + Wedderburn and CBRE.

The Europe City Retail Fund focuses on acquiring “high quality, income producing assets in prime locations across Europe’s capital and tier one cities”. The Glasgow deal brings the fund’s portfolio to 21 assets across ten cities, including Copenhagen, Dublin, Madrid, Milan and Paris, with a total value in excess of €620 million (£540m).

AEW is one of the world’s largest property asset managers, with some €65.4bn under management as of 31 December. It has 700 employees, with its main offices in Boston, London, Paris and Hong Kong.