Commercial Property News

DTZ's Scottish investment agency team has had a strong end to 2005 advising on £200 million of investment transactions across Scotland.

The Investment Director in DTZ's Edinburgh office, Stuart Agnew, comments: "It is extremely encouraging to see a number of transactions which have been worked on for a while, all coming together at one time and this reflects a co-ordinated approach to clients requirements and the 'wall' of money seeking to invest in Scotland linked with improving occupational markets. As well as seeing a marked increase in general investment activity, we are also seeing the office funding markets in Glasgow and Edinburgh picking up."

Details of the individual deals are:

- Mavor Avenue, East Kilbride - purchase and funding of a new retail warehouse development in East Kilbride, let to B&Q;, Comet and Carpetright comprising 136,000 sq ft and a rent roll of circa £2.1 million. The acquisition totalled c£40 million and the scheme was purchased directly from MacDonald Estates plc. DTZ acted on behalf of two separate Irish consortium clients in the purchase.

- Erskine House, 72-80 Queen Street, Edinburgh - sale of the 85,000 sq ft multi-let office building to a new German Fund, Blue Capital, for £27.75 million. The property is let to tenants including PwC, Scottish Ministers, Morrison WS and Deutsche Bank. DTZ acted on behalf of a private overseas investor.

- Pitheavlis, Perth - DTZ acted on behalf of Active Asset Investment Management Limited on the sale of the former General Accidence HQ in Perth to Glamore Fund for £27.5 million. The sale represents an overall net initial yield of 7.16%.

- 1 Waterfront Avenue - DTZ advised acted an Irish institutional client on the purchase of the Scottish Gas headquarters office building in Granton for £26.5 million at a net initial yield of c.6%. The property is let to GB Gas Holdings Limited and comprises 91,000 sq ft.

- Dalmore House, 310 St Vincent Street, Glasgow - DTZ advised private overseas clients on the sale of the building for £20.25 million representing an overall initial yield of 6.9%. The building is let to Whyte & MacKay plc and comprises 17,000 sq ft. The purchaser was a private family trust.

- Westergate, Argyle Street, Glasgow - advised CGIS on the purchase of this 200,000 sq ft building for c£20 million. Tenants include the Ministry of Defence. The property was purchased from Miller Developments at an initial yield of around 7%.

- Watermark Building, Alba Campus, Livingston - DTZ acted on behalf of Cadence Design Systems Limited in the sale of this 103,000 sq ft office headquarters, which is let to Cadence Design Systems, Scottish Water and Hewlett Packard. The property was sold for £18.2 million to IM Properties Finance Limited reflecting a net initial yield of 7.65%.

- 180 St Vincent Street, Glasgow - DTZ and Ryden acted on behalf of County Properties Group on the sale of the multi-let office investment to Royal London Asset Management for £16.5 million. The sale price reflected a net initial yield of 6.4%.

Scottish Ministers have approved a major new office development and spectacular public arcade by EDI that is set to breathe new life into a derelict site in Edinburgh's city centre following an extensive Public Inquiry.

The development is located in one of the last major gap sites in Edinburgh's centre at the site of the former Morrison Street goods yard. The scheme is set to regenerate a site that has lain almost derelict for 40 years. The developement will offer offices, shops, bars and cafés ranged around a spectacular, European-style, 5-storey public arcade and square.

Designed by the award winning firm of Edinburgh architects, Reiach and Hall, Phase 1 of the development will offer 32,487 sq m of offices, retail, leisure, licensed premises and car parking on a 1.767 ha site close to Haymarket Station. There will be a "city-store" style supermarket accessed from the arcade via the new square.

The Haymarket arcade, which will extend to the roof of the building and will be lit by a glass roof, will be lined by shops and cafes on two levels. In developing their proposals, Reiach and Hall studied arcades across the UK and Europe, incorporating into their design the elements that give famous European arcades their special qualities.

The scheme sits on a prominent corner site alongside two conservation areas and the World Heritage Site of Edinburgh's city centre. It was approved by The City of Edinburgh Council's Planning Committee in August 2004, but subsequently called in for Public Inquiry by the Scottish Ministers.

The developers plan that the first phase will eventually be complemented by two further phases, to be designed by Page and Park and Alan Murray Architects respectively. Ian White Associates are acting as landscape architects on all phases and sustainability consultants Third Wave are employed to ensure that the building anticipates best environmental practice on issues such as waste and energy use.

Property agent Cushman & Wakefield Healey & Baker (C&W;/H&B;) has secured two new tenants for Anniesland Business Park in the West End of Glasgow.

Audio visual equipment supplier Far Heaven has taken Unit 50, which covers 1,200sq ft on a five year lease at a rental of £6.50 per sq ft.

Worktop specialist Rocky Tops has taken Unit 12C4 (2,280sq ft) on a five year lease with break at year three at a rental of £5.00 per sq ft.

Michael Facenna, a surveyor with C&W;/H&B;, said: "Anniesland Business Park occupies a prime location in the West End of the city. The park benefits from excellent access to the Clyde Tunnel, Clydeside Expressway and the M8, therefore it is an ideal location for companies with clients both sides of the river.

"It is also within walking distance of Anniesland Cross where there are extensive shopping and leisure amenities along with excellent public transport links. For staff who like to visit the gym either side of their working day there is also a Next Generation Health Club on the doorstep of the park.

"The Park has been upgraded and expanded recently with the completion of 14 new high quality industrial/trade counter units - one of which Far Heaven will occupy. The units range in size from 1,200 sq ft upwards and we are already experiencing healthy levels of interest in them. All of the units are available to let on flexible full repairing and insuring terms."

An office complex planned for Dundee and valued at £17.5 million will mark the first development in Tayside for Tom Coakley, one of Scotland's leading commercial property developers.

The Coakley Business Park will also be the first office development in the City to offer accommodation for sale as well as lease. Planning permission is currently being sought to demolish the empty, previous headquarters of Low & Bonar situated on a 1.8 hectare (4.5 acres) site on Faraday Street by the city's ring road.


This will make way for four buildings which will provide 75,000 sq ft of attractive pavilion style offices. Fully occupied, the three and four-floor office buildings will house up to 700 employees.

Construction would create a further estimated 120 jobs during a phased building programme over two years. The intention is that, subject to planning permission, work would begin in spring 2006. The architect is Ian Burke Associates (Neil Rankin) and the letting agents are J & E Shepherd (Gerry McCluskey) and Jones Lang LaSalle (Craig Watson).

The offices will be built to an extremely high standard and will provide flexibility, allowing buyers or tenants to tailor the facilities, such as the communications infrastructure, to their particular needs. Parking will also include an underground element to allow attractive landscaping of the grounds.

Gerry McCluskey, partner with J & E Shepherd Commercial, commented:
"Coakley Business Park reflects the confidence in and commitment to the current Tayside commercial property scene and this has the potential to attract organisations to Dundee as there has been a lack of good quality office space of this type in the city.

"This is even rarer in that as an option the offices will be available for sale, either floor by floor or as complete buildings. In all other cases top class office accommodation in Dundee is only ever available for lease, hence this represents a unique opportunity for businesses wishing to purchase office property as an investment."

Kenmore Property, the fast-growing property empire of Edinburgh-based John Kennedy, has reported a near-doubling of turnover to £129m as it continues to use joint ventures to leverage its expertise.

Pre-tax profit was unchanged at £11.8m, after an interest bill more than doubling to £21m, but revaluations of investment and joint venture properties have added £8.1m to recognised gains, giving an increase of two-thirds to £17.9m.

Kennedy said: "We see great potential in Europe and we have already experienced not only realised profit but revaluations of quite a significant nature."

A portfolio of 92 supermarkets in Sweden, Kenmore's second new territory after France, was sold during the year, and the group is now also invested in Norway, Holland, Belgium, Germany and Finland, with a focus on industrial warehousing.

One year to the day since he carried out the turf cutting ceremony to mark the start of the project, Kirkcaldy MP Gordon Brown visited John Smith Business Park in Kirkcaldy on the 9th of December to celebrate the completion of the landmark office development.

The £3.5 million development, JSBP2, by Fife Council and Scottish Enterprise Fife is key to plans to bring new jobs and new investment to the town. The 27,000 sq. ft. building at the western gateway to the town will provide a high quality environment for financial services, civil service or other organisations seeking a prestigious headquarters office development for relocation or expansion.


Completed on time and on budget, it is one of a number of projects which form part of ambitious plans by the Kirkcaldy Renaissance Partnership to bring new life to Kirkcaldy over the next 10 years. There are already interests in the building and discussions are on-going.

Gordon Brown said: "I would like to congratulate all those involved with the development of this new facility. It is important that we build up the infrastructure to ensure that Fife can compete and be successful in bringing in high quality jobs. This facility will mean new businesses and new jobs and should be viewed as the start of an exciting development that will see John Smith Business Park grow in strength over the next few years."

John Smith Business Park is one of Fife's key strategic development sites and its development is part of a programme of business infrastructure projects which are being undertaken in Fife to ensure that the area is able to offer a competitive range of sites and buildings in attractive and accessible locations. Future development at John Smith Business Park will include further offices, leisure including hotel and conference facilities and residential.

Councillor Anne McGovern, Leader of Fife Council said: "This development is a major step in taking forward our vision for Fife - a vision in which a continuing shift to a more diverse and higher value service based economy is a vital part. It is also a sign of the confidence which we and Scottish Enterprise Fife have in the future of Kirkcaldy and central Fife."

Joe Noble, Chief Executive Scottish Enterprise Fife commented: "Central Fife has suffered from decline in the manufacturing sector and this development offers Kirkcaldy the opportunity to attract investment and jobs from the growth sectors in the economy to build upon the success of companies already on the Business Park such as MGt. I am very confident that the building will attract an occupier in early course and congratulate Fife Council on their bold investment decision."

Kenmore Property Group has lodged a planning application with the City of Edinburgh Council for a landmark 98,000 sq ft (9,105 sq m) Grade A office development, set to improve dramatically the streetscape of West Port in Edinburgh's Exchange District, one of the city's busiest thoroughfares leading to the Old Town.

The application proposes demolishing the tired and dated eight storey concrete West Port House building between Lady Lawson Street and Lauriston Street, bought by Kenmore earlier this year, along with two adjacent public houses. A former Post Office headquarters, the building has blighted the area as it has lain unoccupied on this prominent site for 10 years. The Kenmore development team, working with Michael Laird Architects, are set to turn this on its head by investing £20 million in demolition, road improvements and construction of a purpose-built, striking eight storey office building with a sandstone and glass frontage.

This scheme will mark a new era as it cements the recent development in the immediate area, revitalising and connecting adjacent commercial buildings Evolution House, Novotel, Solus Lodge Hotel and student residences. It also enhances permeability across Edinburgh's business district by linking The Exchange and Saltire Court with the ongoing mixed-use office and residential Quartermile development.

Mary Galbraith, Associate Director of Kenmore, comments: "The new West Port House will be a real breath of fresh air for Edinburgh. It makes good use of a very visible site with strong and simple contemporary architecture to complement its surroundings. As well as ticking boxes such as state-of-the-art facilities and convenient parking, the building will provide some of the most spectacular views of the city and Edinburgh Castle. We are confident that, on completion, it will be recognised as among the best office space in Edinburgh."

Kenmore has worked closely with the local councillor and community council for the Tollcross ward to ensure that the regeneration of the area serves both residents and businesses alike. Following discussions, the developer has taken on board feedback and revised the proposals accordingly, so that the colonnade forms part of the building itself rather than being a stand-alone entity, and the pavement is extended, allowing freer pedestrian movement. The removal of two of the five public houses on the street has also proved welcome, in an attempt to shift the lingering perception of the area.

Anne Wigglesworth of Tollcross Community Council comments: "We are very happy that there is a new building going up in place of the old one and hope it will be a great improvement. We are keen to see the space in front of the building retained for access and hope it will chime in with the stone of the surrounding buildings."

Jones Lang LaSalle and Ryden have been appointed joint agents for the property. Head of office agency for Jones Lang LaSalle, Cameron Stott, adds: "This area of Edinburgh has continued to improve dramatically over the past few years thanks to the spread of the city's financial Exchange District. Coupled with the commencement of development on the old Royal Infirmary site, West Port is set to become a sought-after central location."

Peter I'Anson of Ryden agrees: "This building will be a compelling option for occupiers as its contemporary design is ideal for either single occupancy or for medium-sized businesses which prefer to take space on a floor-by-floor basis. With activity in the 10,000-20,000 sq ft market on the increase, this will help West Port House stay ahead of the competition."

The upper level of the building extends to 9,000 sq ft (836 sq m), while floors ground to six measure approximately 17,000 sq ft (1,579 sq m) each. There is also provision for 13 on site parking spaces. Once the planning application is approved, demolition of the existing building will commence immediately, with completion of the project anticipated in spring 2008.