Investors still hungry for deals
Ca’d’oro sale shows ongoing overseas appetite
One of Glasgow’s most familiar office buildings has been acquired by an overseas investor for £14.1 million in a deal seen to reflect continuing international interest in the Scottish property market.
The transaction was led by Knight Frank, acting on behalf of Hamilton Capital Partners, the investment group led by former Motherwell FC owner John Boyle.
The Ca’d’oro building, on the intersection of Gordon Street and Union Street in the city centre, has been purchased off-market by a private overseas investor. The sale price reflects a net initial yield of 6.5% to the purchaser.
The five-storey Ca’d’oro was built in 1872 and provides 47,397 sq. ft. of office and retail accommodation.Tenants include law firm Harper Macleod, the Co-operative Group and Atos IT Services.
Knight Frank has managed the building since it was bought from insurance provider AXA in 2013 and has invested more than £1.6m in refurbishment.
Patrick Ford, partner for Knight Frank in Glasgow, said the deal was indicative of more international investors looking at commercial property opportunities in the city.
He said: “The Ca’d’oro deal demonstrates the high level of demand from overseas investors, which is becoming increasingly relevant as Glasgow’s, and Scotland’s, investment environment evolves into a truly global market.
“Traditionally we’ve seen German and North American money coming into the city, but now we’re receiving more interest from the Middle East, Israel and other parts of Asia.
“Prime yields are now at 5.50%, a relative discount to the other big six regional centres. Given the almost unprecedented demand for prime office space and relative value compared to other regional UK cities, many international investors will see Glasgow as a great opportunity to achieve strong returns and sustained performance.”
Stephen Kelly, director at Hamilton Capital Partners, commented: “Knight Frank advised us on the purchase and successful sale of this large and complex asset. The firm complemented its transactional advice with expertise from the building consultancy and management teams, which operated under difficult conditions to achieve an outcome in excess of our expectations.”
The Hamilton Group is a private investment company, which has initiated, led and funded in excess of 50 transactions in the property and private equity sectors in the past 10 years.
Mr Boyle was the majority owner and founder of Direct Holidays which was sold to Airtours in 1998 for £84 million.