FOR SALE PRIME LEISURE INVESTMENT IN THE HEART OF GLASGOW - GLASGOW
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GLASGOW
FOR
SALE
PRIME LEISURE INVESTMENT IN THE HEART OF GLASGOW
GLASGOW
02
Investment
Summary
• Glasgow is one of Europe’s most exciting and vibrant cities and the largest in Scotland
• Rare opportunity to acquire the only exclusive leisure scheme in Glasgow city centre
• Situated a few minutes’ walk from George Square, Queen Street Station, Strathclyde
University and the core retailing/office areas of the city centre
• There are approximately 130,000 students in Glasgow, ranking it 3rd in the UK in terms
of numbers
• Merchant Square comprises a multi-let leisure destination positioned around a
covered courtyard
• Located adjacent to Candleriggs Quarter, the UK’s biggest city centre development site
outside of London, and Glasgow’s most exciting site
• Recent substantial developments in the area include Strathclyde University’s £90
million Technology and Innovation HQ and the £200 million Collegelands project
• Grade A listed building - no vacant rates
• Long Leasehold expiring 2123 – Head rent geared to 16% of Gross Rent received
• Current Net Rent of £737,689 per annum
• Net ERV of £767,887 per annum
• Opportunity to drive the rent roll based on the recent O’Neill’s rent review award and
agreements
• WAULT to expiry 16.1 years (10.0 years to break)
• Our clients are seeking offers over £8,135,000 (EIGHT MILLION ONE HUNDRED AND
THIRTY FIVE THOUSAND POUNDS STERLING) exclusive of VAT which reflects a net
initial yield of 8.50%, a reversionary yield of 8.85% (based on standard purchaser’s
costs) and a low capital rate of only £105 per sq ft
03
Glasgow
SAUCHIE
HALL ST
BATH ST BUCHANAN GALLERIES
SHOPPING CENTRE
WEST RE CITY OF GLASGOW
GENT ST COLLEGE
Glasgow is the largest city in Scotland, the commercial and industrial CATHEDRAL ST
WEST GE
capital of the country and the administrative centre for the West of ORGE ST
ER ST
Scotland. The city has an urban population of approximately 625,000 BUCHANAN ST
people and a catchment population of over 2.8 million people within a 40 SUBWAY QUEEN STREET
N HANOV
ST VINCE STATION
minute drive, making Glasgow the third largest urban centre in the UK. NT ST GEORGE
ST
The city benefits from 2 main train stations; Central Railway Station and
T S
E ST
RENFIELD
ST
Queen Street Railway Station both of which provide regular services to UNIVERSITY OF
WEST NIL
GEORGE STRATHCLYDE
AN
London and link to the wider Scottish Railway Network. STRATHCLYDE
SQUARE
BUCHAN
GLASGOW STUDENT HALLS
CITY CHAMBERS GEORGE
ST
Glasgow is Scotland’s centre of employment and an economic GORDON ST
powerhouse, generating £18 billion in gross value each year. There are UNIVERSITY OF
GOMA STRATHCLYDE
1.2 million working age people within a 45 minute commute of the city INGRAM ST
THE TECHNOLOGY
and 2 million within an hour. The city is home to an impressive list of & INNOVATION
T
blue chip companies and major global organisations across numerous CENTRE
HS
GLASGOW
RD ST
ON ST
HIG
sectors including Santander, Morgan Stanley, The Student Loans
ICK ST
CENTRAL MERCHANT SQUARE
STATION
GLASSFO
Company, KPMG, Ministry of Defence, BT, Aggreko, Scottish Power,
HUTCHES
T
BRUNSW
T
QUEEN S
Scottish & Southern Energy, Barclay’s and JPMorgan Chase & Co. UNITE STUDENT
MILLER S
ACCOMMODATION
ERIGGS
With over half a million square metres of retail space, Glasgow is the Candleriggs STRATHCLYDE
largest UK shopping destination outside London. It is also the most Development Site STUDENT
CANDL
ST ENOCH ACCOMMODATION
successful, ranking 2nd in CACI’s UK Retail Ranking and placing it in ST ENOCH SHOPPING
T
ON S
SUBWAY CENTRE
St Enoch New ARGYLE S (ANDREW URE)
the top 20 super league of major European shopping destinations by Centre Development T
ALBI
commercial expenditure. Within a 30 minute drive time from Glasgow,
the comparison goods spend is £4.85 billion per annum whilst
convenience expenditure is £5.23 billion per annum. The city is ranked GLASGOW
as having the highest catchment spend available out of the top UK CROSS
retailing centres.
Glasgow’s Famous Golden Z Retailing Pitch
Situation Education
Merchant Square is situated within Glasgow City Greater Glasgow has a superb education base and boasts
Centre, a short walk from the bustle of the busy 5 universities and 3 super colleges educating some 130,000
retailing thoroughfares of Buchanan Street and students from 135 countries, ranking third in the UK in
Argyle Street. terms of number of students. Employers are attracted by
the level of qualifications job applicants have achieved, with
Dating back to the 1800s, Merchant Square is housed almost 40% of Glaswegians having NVQ3 and above. This is
in the part of Glasgow’s Old Fruitmarket in the heart higher than any other comparable city.
of Merchant City.
04
Glasgow’s Interesting Stats & Facts
A CATCHMENT Glasgow is to benefit from an
investment of approximately
OF 2.8M PEOPLE
31%
of population degree
with a comparison goods spend of over
£6.6 billion. Annual catering spend of £372m
£1.13 BILLION
as part of the Glasgow City Region Deal
educated or higher (Glasgow City Council 2019)
32.9%
The city centre`s vibrant shopping Glasgow named
‘STYLE MILE’ of population aged BEST RANKED
COMMANDS A FOOTFALL between 18 - 35.
CITY TO LIVE FOR
OF 50M ANNUALLY. MILLENNIALS
Furthermore, 2.2m tourists of which 31% visit the City each year, According to Independent research,
adding a spend of £619m to the local economy click here to find out more
05
GLASGOW
Glasgow
RIVER CLYDE SAUCHIEHALL STREET Caledonian
University
Glasgow Central
Train Station Buchanan Galleries
Buchanan Street Shopping Centre
Subway Station
HOTEL DEVELOPMENT
• 250 bed Premier Inn Hotel Queen Street
• Opens Summer 2020 St Enoch
BUCHANAN STREET Train Station
Subway Station
GEORGE SQUARE
CUSTOM HOUSE St Enoch
DEVELOPMENT Shopping Centre
• 294 bed Clayton Hotel
• 162 bed Adagio Aparthotel INGRAM STREET
• Under construction Argyle Street
Train Station
ARGYLE STREET WILSON STREET University of
ST ENOCH CENTRE NEW Strathclyde
DEVELOPMENT
CANDLERIGGS University of
• £40 million investment
• 100,000 sq ft new retail Strathclyde
& leisure Innovation
• 9 screen Vue cinema TRONGATE SERVICED Centre
APARTMENTS
DEVELOPMENT
University of
Strathclyde Student
Accommodation
KING STREET CAR PARK
DEVELOPMENT SITE
BELL STREET
CANDLERIGGS
DEVELOPMENT University of
Strathclyde Student High Street
• 850,000 sq ft of residential, Accommodation Unite Student Train Station
student, hotel and (Andrew Ure) Accommodation
commercial space Collegelands
• Planning approved Student Campus
GET LIVING
BTR SCHEME
Glasgow’s Famous Golden Z Retailing Pitch 06
Description Merchant Square
Merchant Square comprises a Grade A listed multi-let leisure destination
positioned around an internal covered courtyard. The property includes multiple
bars, restaurants, nightclubs a gaming arena and offices on the upper levels.
The courtyard hosts weekly craft markets and events throughout the year.
& Events
Once a merchant’s market, the indoor venue is now a stylish and Merchant Square is a long established venue for hosting some of Glasgow’s most popular
sophisticated destination for eating, drinking and entertainment. events. It is regarded as one of the best venues in the city for hosting conferences and dinner
parties, with capacity for approximately 1,600 people.
It is the main venue for the annual Merchant City Festival, a wonderful celebration of creativity
which brings carnival to the streets and venues in the heart of Glasgow. It also hosts an annual
Hogmanay Party, which has become one of the main events in Glasgow’s calendar year.
There are 7 events booked in for 2020 with discussions ongoing for several more. The 2020
events will generate a minimum of £12,850.
For more information on events at Merchant Square, check out the website;
www.merchantsquareglasgow.com
07
Existing Occupiers
BAR SOBA (UNIT 6,7 & J) BAR SQUARE (UNIT C & D) BEER CAFE (82 CANDLERIGGS) DISTRIKT (CLUB 2)
A stylish Asian inspired bar and restaurant. A popular bar and food venue with a large Award winning bar for having the best Distrikt is a speciality club offering booth and
Offers high quality fresh food, cocktails and a courtyard area and a lively atmosphere. selection of beers in Scotland. Stocks a wide waitress service within a contemporary fit
vibrant atmosphere. range of beers from all around the world. out and ambiance.
ESCAPE REALITY (BASEMENT) FANELLI’S (UNIT 4 & 5) JUNGLE RUMBLE (CLUB 1) METROPOLITAN (UNIT F)
Offers a unique escape room experience An Italian family restaurant with a menu Jungle Rumble is one of the top adventure One of Merchant City’s most popular venues.
with expertly created themed rooms that featuring all the classic dishes. Benefits from golf operators in the UK with 4 existing sites A cocktail bar and restaurant with a great
have some of the most advanced special a seated terrace and a balcony which can be and several more in development. reputation for lively nights. A stylish and
effects in the UK. The venue enjoys a private hired out for party events. contemporary fit out.
bar for guests. Rated the No 1 thing to do in
Glasgow on Tripadvisor.
MONTEREY JACK’S (UNIT 1,2 & 3) O’NEILL’S (UNIT A) STEAK, CATTLE & ROLL (UNIT B) VIN-CRU (UNIT E)
Monterey Jack’s serves up American A Mitchells & Butler themed Irish sports bar. American inspired menu from an Vin-Cru is a new casual wine bar due to
inspired gourmet burgers. They won Best Offers a variety of live music, food and independently owned Glasgow business. open in Merchant Square on 28th November
Burger Scotland Award 2019 - 2020. They sporting events. They have a second premises on 2019. The people behind it are owners of
now have nine restaurants across Scotland. Sauchiehall Street. two of Glasgow’s most popular culinary
institutions: Dennistoun Bar-B-Que and The
Hug and Pint.
08
BAR SOBA
MONTEREY MCPL
JACK'S FANELLI'S
Floor Plans
FANELLI'S BAR SOBA
BALCONY BALCONY
MONTEREY
JACK'S
BALCONY
METROPOLITAN
BALCONY
METROPOLITAN STEAK,
CATTLE
& ROLL
First Floor
BAR SOBA
OFFICES
BEER CAFE MONTEREY BAR SOBA
JACK'S FANELLI'S
DISTRIKT BEER CAFE Public Toilet
BAR SOBA
BALCONY
FANELLI'S
BEER CAFE MONTERY JACK’S BALCONY
BALCONY BALCONY
CLUB 1
MERCHANT SQUARE
METROPOLITAN COURTYARD
ESCAPE REALITY CLUB 1 METROPOLITAN
METROPOLITAN BALCONY
BAR SQUARE STEAK, CATTLE & ROLL
BALCONY BALCONY
VIN CRU
BAR
SQUARE
VIN CRU O'NEILL'S
STEAK, CATTLE
STEAK, BAR SQUARE & ROLL
CATTLE &
ROLL
BAR SQUARE
Basement Ground Floor
09
City Centre
NEW BTR CANDLERIGGS QUARTER
Get Living has secured planning consent for Scotland’s The new Candleriggs Quarter is directly opposite
largest BTR scheme - 727 units behind High Street Station, the Merchant Square. It is the UK’s biggest city
located 500 metres from Merchant Square. centre development outside of London and has
Resurgence
consent for 850,000 sq ft of residential, student,
COLLEGELANDS DEVELOPMENT hotel and commercial space. Drum Property Group
Collegelands is part of a £200m development project. formed a joint venture with Stamford Property
The development comprises 588 student study bedrooms. Investments earlier this year to take this exciting
project forward.
NEW HOTEL DEVELOPMENTS
There are numerous hotel developments under construction The current planning permission is granted for:
and planned within and surrounding the Merchant City
including: • 132 high quality apartments
It is an exciting time for Glasgow with huge levels of investment • 435 new flats for rental
helping to promote positive change, growth and vibrancy in this • 250 room Premier Inn at St Enoch Square which will • 586 rooms of student accommodation
historic district of the city. The city centre has seen a resurgence complete in 2020. • 123 room hotel
following significant investment made in conjunction with the 2014 • Over 60,000 sq ft of retail accommodation
Commonwealth Games. The momentum created continues and • 204 room Citihome Aparthotel granted permission
below is a sample of the developments planned. November 2019. A new planning application was made in
• Custom House, a waterfront development comprising a December 2019 to expand the existing consent to
294 room hotel operated by Dalata and a 162 bed include leisure, gym, event business space and
Aparthotel operated by Adagio. public houses. Work to clear the site and demolish
unlisted buildings has commenced.
• Plans approved for 157 room Aparthotel at the junction
of Trongate and Hutcheson Street.
CANDLERIGGS QUARTER
10City Centre
Resurgence
Continued...
QUEEN STREET STATION
A £104 million upgrade of Queen
Street Station will create a landmark,
GLASGOW
modern station reflecting its role
as a gateway to Glasgow. The east
side of the building will become an
extension to Buchanan Galleries and
it will create new passenger facilities
over 2 levels. The public floor space
will be doubled in size and platforms
extended. Construction is already
underway with completion targeted
in 2019.
KING STREET CAR PARK ST ENOCH CENTRE 110 & 100 QUEEN STREET
DEVELOPMENT Construction has started on a £40m 110 Queen Street comprises 9 floors of office
This landmark gap site is leisure development at one of Glasgow’s accommodation extending to 143,000 sq ft where rents
currently being explored largest shopping centres. The of £29.50 psf have been achieved and 20,000 sq ft of
by Holmes Miller with the redevelopment will add 30,000 sq ft to retail space. Office tenants include – ACCA, Brodies
intention of creating a new and the centre and include a cinema, retail LLP, DWF LLP, Deloitte LLP, Grant Thornton UK LLP
vibrant mixed-use scheme. outlets and restaurants. It is scheduled to and WSP. Retail tenants include – Armani and Gant.
be opened by the summer of 2020.
Completed in March 2017, 100 Queen Street is a high GARMENT FACTORY
quality office refurbishment extending to 54,000 sq ft Recently refurbished award winning office scheme
providing 6 floors of office accommodation and extending to 48,000 sq ft located in the heart of the
4 retail units. vibrant Merchant City, only a 2-minute walk from
Merchant Square.
11Tenancies & Accommodation
ADJUSTED
GIA RATE ERV RATE LEASE BREAK NEXT
UNIT TENANT GIA RENT PA ERV PA EXPIRY COMMENT
(SQ FT) (PSF) (PSF) START OPTION REVIEW
(SQ FT)
Mitchells & GR - 6,842 • 2018 rent review settled by Arbitration. Rental rate of
Unit A Butlers Retail Ltd CY - 540 7,382 £157,000 £25.00 £157,000 £25.00 06/07/1998 05/07/2048 06/07/2023 28/05/2023 £25.00 psf awarded with an end allowance for quantum at
t/a O'Neill’s T - 7,382 13.5%. 6 months notice required on TBO.
GR - 1,764
• MBO 28/05/2025 giving 6m notice.
Finn Group Ltd CY - 1,025
• Lease stated area used for s/c.
Unit B t/a Steak, 1st - 455 3,060 £72,500 £23.69 £76,500 £25.00 28/05/2010 27/05/2035 28/05/2025 28/05/2020
• Deposit £18,125
Cattle & Roll Base - 786
• Included Additional Basement Space at Nil Rent.
T - 3,244
GR - 2,381
Margaret Latimer CY - 779
Unit C & D 3,420 £80,000 £23.39 £85,500 £25.00 17/10/2001 16/10/2038 28/08/2022 • 5 yearly rent review.
t/a Bar Square Base - 1,298
T - 4,458
• 3 months rent free.
GR - 916
Vin Vin Vin Limited • £7,500 rent deposit held for duration.
Unit E Base - 173 951 £30,000 £31.56 £30,000 £31.56 08/10/2019 07/10/2034 08/10/2024
t/a Vin Cru • RR to higher of OMV or RPI.
T - 1,089
• Schedule of condition.
GR - 2,563
CY - 1,105
M-City Bar & • The 2018 rent review was agreed at £25.00 psf, less an end
1st - 4,973
Unit F Restaurant Ltd 5,830 £128,750 £25.00 £128,750 £25.00 03/05/2002 27/11/2033 28/11/2018 allowance of 13.5% for quantum. Tenant has an option to
Bal - 1,403
t/a Metropolitan extend by 5 years at expiry.
Base - 2,488
T - 12,532
GR - 1,597
HBCBar Limited CY - 301
82 Candleriggs 2,093 £42,000 £20.06 £52,325 £25.00 08/07/2002 30/06/2037 28/05/2022 • Review to OMV.
t/a Beer Cafe Base - 977
T - 2,875
GR - 1,562 • 6 months Rent Free.
Monterey Jacks
CY - 725 • Review upwards only to higher of OMV or RPI.
Glasgow (Central)
Unit 1, 2 & 3 1st - 1,193 2,779 £60,000 £21.59 £69,475 £25.00 13/11/2018 12/11/2033 13/11/2023 • £30k rent deposit. 50% of deposit returned end of yr 1.
Limited
Bal - 645 Balance returned no earlier than end of yr 2 if net profit is
t/a Monterey Jacks
T - 4,125 double passing rent.
• Service charge cap at £20,000 grown at RPI - no shortfall.
G - 1,045
• RR to higher of OMV or RPI.
Italiano Glasgow CY - 798
• Tenant option to extend by 5 years subject to 9 months
Unit 4 & 5 Limited 1st - 1,389 2,389 £55,000 £23.02 £59,725 £25.00 19/06/2019 28/04/2031 29/04/2021
notice (TOE).
t/a Fanelli’s Bal - 663
• £19,500 deposit to be built up. £5,833 upfront followed by 8
T - 3,895
months instalments of £1,458.34.
G - 2,857
• Rent increased from £70,000 pa wef 2020 review date.
CY - 729
• Guarantee from SWE Leisure Limited.
SMS Leisure Ltd 1st - 587
Unit 6, 7 & J 4,096 £90,000 £25.00 £90,000 £25.00 03/03/2015 02/03/2035 03/03/2025 • 03/03/2020 rent review agreed at £25.00 psf less end
t/a Bar Soba Bal - 558
allowance of 12.12% for configuration (previous rent was
Base - 980
£70,000).
T - 5,711
12Tenancies & Accommodation
ADJUSTED
GIA RATE ERV RATE LEASE BREAK NEXT
UNIT TENANT GIA RENT PA ERV PA EXPIRY COMMENT
(SQ FT) (PSF) (PSF) START OPTION REVIEW
(SQ FT)
Courtyard SMS Leisure Ltd • Rolling 1 month landlord only
CY - 277 277 £5,000 £18.05 £6,925 £25.00 11/01/2016 02/03/2035 03/03/2020
Space t/a Bar Soba break option.
• Guarantee from Nocturnal Capital Ltd.
• TBO on 5th anniversary of lease with 6m prior written
Main notice.
Escape Gaming Ltd
Basement B - 3,746 3,746 £29,000 £7.74 £29,000 £7.74 10/10/2016 09/10/2026 10/10/2021 • 6m RF from 10/10/2021.
t/a Escape Reality
Room 1 • S/c capped at £8,000 pa which is grown at RPI.
• Rental deposit of £7,250 + VAT held (£8,700).
• Schedule of condition.
• New 15/5 lease in legals.
Jungle Rumble G - 213 • Stepped rent, Yr 1) £45k Yr 2) £46.25k Yr 3) £47.5k Yr 4)
Club 1 (Merchant Square) B - 8,606 £50,000 £5.67 £50,000 £5.67 tbc 15 years 5 yearly £48.75k Yr 5) £50k. 5 yearly reviews to OMV. Vendor to
Ltd T - 8,819 top up.
• 3 month deposit.
CPS Entertainment
• Lease states premises is exactly
Club 2 / Unit Q (Glasgow) Ltd B - 2,760 £23,000 £8.33 £23,000 £8.33 01/11/2014 31/10/2029 01/11/2024
2,670 sq ft for service charge.
t/a Distrikt
MCP Office - 1st - 872
M-City Bar & • TBO on 6 months notice.
1st Floor & B - 746 872 £10,250 £11.75 £10,250 £11.75 20/01/2016 19/01/2023 20/01/2021
Restaurant Ltd • Right to use Basement Storage Area.
Basement T - 1,618
MCP Office - M-City Bar &
872 872 £10,250 £11.75 £10,250 £11.75 20/01/2016 19/01/2023 20/01/2021 • TBO on 6 months notice.
2nd Floor Restaurant Ltd
• 4 year average net income.
ATM Note Machine £15,451 £15,451 02/10/2018 01/10/2021 • Annual rent 11p per transaction.
• TBO anytime on 3 months notice.
Courtyard Craft Market 13,070 £20,000 £20,000 • 4 year average net income.
TOTAL 77,747 £878,201 £914,151
Headrent @ 16% of
£140,512 £146,264
Gross Rent received
Net Rent / ERV £737,689 £767,887
Our rental analysis is based on applying the following reduction factors to the GIA; Bsmt 20%; GF 100%; CY 100%; 1st 25%; Balcony 30%.
Club 1 & 2 (Unit Q) and Escape Rooms are analysed on a traditional GIA basis.
WAULT to expiry 16.1 years (10.0 years to break).
13Tenure VAT
The property is held on a long leasehold from Our clients have elected to wave exemption
Glasgow City Council from 19/02/1998 until for VAT and accordingly VAT will be payable on
18/02/2123. The rent is calculated annually the purchase price, although we anticipate the
based on 16% of the Gross Rent received. sale will be dealt with by way of a Transfer of
a Going Concern (TOGC).
Covenant Data Room
D&B credit reports are available in the Access can be provided to a data room.
data room.
Legal Costs EPC Proposal
Each party will be responsible for their own Available upon request. Our clients are seeking offers over £8,135,000 (EIGHT MILLION ONE HUNDRED
legal costs in connection with the transaction. AND THIRTY FIVE THOUSAND POUNDS STERLING) exclusive of VAT which
reflects a net initial yield of 8.50%, a reversionary yield of 8.85% (based on standard
purchaser’s costs) and a low capital rate of only £105 per sq ft.
14GLASGOW
Viewing &
Further
Information Stewart Sheridan
stewart@sheridanproperty.co.uk
07740 940 898
Graeme Millar
graeme@sheridanproperty.co.uk
07523 512 804
For queries on management please contact:
Niall Joyce
njoyce@savills.com
Cathal Keane Noel Tiffney 0141 222 4116
Please contact the joint selling agents:
cathal@sheridanproperty.co.uk noel@sheridanproperty.co.uk
07808 627 224 07870 999 799
Sheridan Property Consultants Savills
37 One 163 West George Street
37 George Street Glasgow
Edinburgh G2 2JJ
EH2 2HN
Tel: 0131 300 0296 Tel : 0141 248 7342
Sheridan Property Consultants for themselves and for the vendors or lessors of this property whose agents they are give notice that: (i) the particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute, nor constitute
part of, an offer or contract; (ii) all descriptions, reference to condition and necessary permission for use and occupation, and other details are given without responsibility and any intending purchasers or tenants should not rely on them as statements or representations of fact but
must satisfy themselves by inspection or otherwise as to the correctness of each of them and are advised to do so; (iii) no person in the employment of Sheridan Property Consultants has any authority to give representation or warranty whatever in relation to this property; (iv) all
prices, rents and premiums quoted are exclusive of VAT at current rate; February 2020.You can also read
