Glasgow is Top Dog

Thursday, May 10, 2007

The Herald

Glasgow is putting in place another building block to secure its new supremacy in the Scottish office market. Having just knocked Edinburgh off its perch by achieving the country’s top office rental of £27.50 per sq ft, the west is embarking on another new 96,000 sq ft top of the range office building, this time on Argyle Street in the city centre.

Taylor Woodrow and Kenmore has started work on construction of the £60m grade-A office and residential development, part of the ongoing regeneration of Cadogan Square.

Taylor Woodrow has scrapped an earlier option for the site and teamed up with property development and fund manager Kenmore, which will be providing the forward funding for new Aedas-designed Cuprum building. The ground the six-storey office block will provide a variety of open aspects overlooking the city from L-shaped floor plates of up to 16,000 sq ft in a project expected to be completed in autumn next year.

The adjoining housing element, providing 122 one and two –bedroom apartments, will take a few months longer. There are 37 car parking spaces.

Taylor Woodrow property development director Guy Parker feels the mix of office accommodation and living space will build on the success of the Cadogan Square mixed-use programme, which has already attracted a range of blue chip occupiers including the Hilton Group, the Scottish Executive Scottish Power and Morgan Stanley. “Each of the partners involved feels there is huge potential for the Cuprum project, especially as demand for quality office and living accommodation in central Glasgow shows no sign of abating,” says Parker. “Our market knowledge tells us that the grade-A space currently being built in the city is almost certain to have been taken up by the middle of the current calendar year and therefore the timing could not be better.”

Grant Rawlinson, investment director of Kenmore, says: “Completing the funding of Cuprum highlights our appetite for new developments opportunities in the UK and reflects our ability to adopt a widening range of deal structures. “We have already witnessed considerable success in the area with the construction and letting of Sentinel and we believe this scheme will capture the imagination of the marketplace and reinforce Glasgow’s growing reputation in the UK office DTZ and Jones Lang LaSalle have been appointed as joint letting agents.

Bill Colville, chairman of DTX, says the timing and prospects for Cuprum look good, and, leaving aside Wilson Bowden’s 4 Atlantic Quay now nearing completion, it should be the next big new grade-A building in the city centre to become available. He says Glasgow looks perfectly placed to benefit from positive employment forecasts for the next three or four years: “In 25 years of plying my trade, this is one of the most active periods. “There was a frenetic time in the late 1980s but this one seems more genuinely founded on stronger performance of the economy and particularly when you actually look at the diversity of sectors which the city has which are actually active. “Moving forward, the important thing is that the city continues it provide a range of accommodation of different floorplate sizes, so that it actually continues to appeal to companies either looking to relocate here, considering second round investment decisions or those looking at Glasgow from London to over seas”.

Joint agents Jones Lang report city centre take-up of 630,000 sq ft last year was significantly ahead of the 10-year average and the current shortage of grade A and grade B stock means rental rates are increasing and there is significant competition for available property.

Associate director Mike Buchan reports that 14% of office requirements last year were for more than 10,000 sq ft and forecasts that pre-lettings from occupiers are highly likely in the months to come. A number of corporate occupiers are assessing their medium to-long-term needs for Glasgow and, in view of the restricted pipeline, were addressing future occupation a number of years in advance.