Global asset manager AEW has acquired the former Scottish stock exchange building in Glasgow from Aberdeen Standard Investments for £33 mln (€38 mln).
The prime retail-led asset, which is located at 153-159 Buchanan Street & 6-11 Nelson Mandela Place, is the first UK purchase for the AEW Europe City Retail Fund.
'This is one of the best retail assets in Scotland, reflecting our highly selective acquisition strategy in the UK,' said Spencer Corkin, AEW's director of investments.
'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,' Corkin added.
The Category A listed landmark property comprises 57,190 ft2 in total, providing 24,920 ft2 of retail space and 22,704 ft2 of office accommodation.
It is fully let to nine tenants, with the ground and first two floors anchored by The North Face and Urban Outfitters, who have been trading there since 2001. The third and fourth floors are let to The Scottish Ministers (the Scottish arm of the NHS), while the fifth floor comprises three smaller office suites.
Three further restaurant/leisure units on the ground and lower ground floors fronting on to Nelson Mandela Place are occupied by Subway, Carlsberg UK, and Absurd Bird.
Christina Ofschonka, fund manager 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.'
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 latest acquisition brings the fund’s portfolio to 21 assets across ten cities, including Copenhagen, Dublin, Glasgow, Madrid, Milan and Paris, with a total value of over €620 mln.
AEW was advised by Brodies and Cushman & Wakefield, while Aberdeen Standard Investments was advised by Shepherd + Wedderburn and CBRE.
