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Monday, July 17, 2023

AWG Property and WG Mitchell joint venture snaps up two Glasgow properties

Joint venture partners AWG Property and WG Mitchell have invested over 50 million on two Glasgow properties to add to their burgeoning portfolio.

The JV has snapped up high profile office building Exchange House in the city's George Street and Shawlands shopping arcade on Kilmarnock Road.

Exchange House is a substantial 115,471 sq ft office building located in Glasgow`s prime central business district.

The 29.35 million purchase price reflects a net initial yield of 5.6% and an equivalent yield of 6.1%. It is currently let to Glasgow City Council and generates an annual income of 1,650,000.

Shawlands Shopping arcade consists of a T-shaped mall extending to 150,000 sq ft with the principle frontage on Kilmarnock Road. It also includes a four storey office building extending to 20,000 sq ft and two multi storey-car parks featuring over 300 dedicated spaces.

AWG / WG Mitchell purchased the shopping centre from a private Jersey trust for more than 21 million, reflecting an equivalent yield in excess of 6.25%.

The centre has an impressive tenant list, including J Sainsbury, Somerfield, Boots, Lloyds TSB, Farmfoods and JD Wetherspoon. Current rental income is just under 1.4 million per annum.

The two deals mean the AWG / WG Mitchell joint venture has a portfolio valued at 96 million. This joint venture is also close to concluding a further investment deal exceeding 9 million. However, in keeping with the joint venture strategy, a 30 million portfolio purchased last year is currently being marketed for sale after value being added.

Tony Donnelly, managing director of joint venture partners AWG said: "Exchange House has a rock solid tenant in the shape of Glasgow City Council with income on the current lease for many years. This makes it a terrific investment for the joint venture.

"Meanwhile, Shawlands Shopping arcade will present both partners with attractive asset management opportunities which will significantly enhance the property's market value.

"Shawlands has a large immediate catchment population and the centre already has some impressive tenants, although it has suffered from a lack of active management in recent times.

"However, we intend to engage in some strong "active" asset management with the aim of promoting Shawlands and creating a shopping experience much more in keeping with what we believe the local demographics require."

Patrick Hegarty, managing director of WG Mitchell said: "These two deals demonstrate the range of properties our joint venture partnership is focusing on.

"Together, the two purchases illustrate that we are keen to continue making creative decisions with our portfolio to maximise the returns on our investment."

AWG Property Limited is one of the leading property developers and property investment companies based in Scotland, with a portfolio split primarily between office assets and retail & leisure in the UK valued in excess of 700 million.

WG Mitchell is a privately owned property investment company that has built up a 500 million mixed property portfolio, including high profile acquisitions such as the Quay leisure park in Glasgow and the Point Hotel in Edinburgh.

WG Mitchell specialises in extracting maximum value from existing developments through centre development and active asset management. The company made its name by investing in property in Northern Ireland in the 1960s and started investing in Scotland in 1997 with the acquisition of the Wardpark industrial estate in Cumbernauld.