a prime retail investment opportunity that ticks all the boxes
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20 -26 Buchanan Street Glasgow
Glasgow
2893 - Buchanan St Investment Brochure
A unique retail investment in Buchanan Street, Glasgow’s premier retail destination.
For Sale Buchanan Street, Glasgow 27,437 sq ft NIA Reconfigured and let to Nike
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Glasgow the UK’s best retail centre outside London
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Nike flagship store investment for sale
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Investment summary Glasgow is Scotland’s largest city and is widely acknowledged as being the UK’s best retail centre outside London. The property occupies a 100% prime position on the pedestrianised section of Buchanan Street, which is Glasgow’s premier shopping thoroughfare. The property is situated adjacent to Princes Square shopping centre and directly opposite House of Fraser. Shopper footfall on Buchanan Street is estimated to exceed 1 million people per week. The property comprises a magnificent new flagship retail store occupied by Nike. The lease is for 15 years on full repairing and insuring terms at a commencing rental of £1,300,000 per annum. There are rent reviews every five years and the tenant has an option to break at the end of the tenth year. Offers in excess of £24,500,000 (Twenty Four Million, Five Hundred Thousand Pounds) are sought for the Absolute Ownership in the property. A purchase at this level will reflect a net initial yield of 5.0% after allowing for purchaser’s costs at 5.8%.
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20-26 Buchanan Street • Glasgow Image for illustrative purposes only
one million shoppers per week
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Location Glasgow is Scotland’s largest city, with a catchment population in excess of two million people (Source CACI) and is widely recognised as the UK’s most important retail centre outside of London’s west end (Source Experian). The property occupies a 100% prime position on pedestrianised Buchanan Street, which is Glasgow’s premier retail thoroughfare and carries an estimated 1 million shoppers per week (Source CACI). Argyll Arcade, Princes Square shopping centre and House of Fraser are located close by.
Buchanan Street is one of Europe’s leading retail thoroughfares and is home to some of the world’s top brands including Apple, Hugo Boss, Urban Outfitters, Karen Millen, Timberland, Monsoon and Zara.
the building
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Description BAM Properties has carried out a major redevelopment of the property in order to create a magnificent new flagship store of 27,437 sq ft NIA over four floors for Nike. The property comprises sales on the ground and first floors, together with ancillary stock and staff accommodation on the second floor, and there is a basement area for future expansion.
The property is listed Grade B and fitted out to Nike’s extremely high specification.
A little history Built in 1889, 20 - 26 Buchanan Street was the first project that the internationally acclaimed architect Charles Rennie Mackintosh was involved with, working as an apprentice. Shortly after completion it became the Wylie Hill Department Store with part of the building forming the locally iconic Cranston’s Tea Room. The building exuded quality and featured a fountain in the basement. In 1972, as fashions changed, the building was remodelled and occupied as a massive John Menzies store.
The upper floors, comprising third to sixth, which were previously used as ancillary areas to the retailer have been brought back into full economic use. These floors have been converted for office use and sold. The lower floors, comprising basement to second floor, have been restored to their former vibrancy and the letting to Nike, an internationally renowned retailer, befits the iconic status of the famous member of the original design team!
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Accommodation
We calculate the approximate dimensions and net internal areas to be as follows: Built Frontage Built Depth
17.5 m
57’ 5”
45.8 m
150’ 3”
sq m
sq ft
Zone A
138.61
1,492
Zone C
104.51
1,125
Floor
Ground Floor Zone B
Zone D
Remainder
Ground Floor Total Ground Floor ITZA Basement
First Floor
Second Floor
Total NIA
Total Reduced Area
143.06 105.99 107.02 599.19 260.21 466.28 860.25 623.17
2,548.89 491.64
1,540 1,141 1,152 6,450 2,801 5,019 9,260 6,708
27,437 5,292
The above net internal floor areas are calculated from the rent review plans as stipulated in the lease. We calculate the approximate gross internal area to be: Image for illustrative purposes only
Total GIA
3,016.54
32,470
the floors
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Second Floor 6,708 sq ft
First Floor 9,260 sq ft
Ground Floor 6,450 sq ft
Basement 5,019 sq ft
the opportunity
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Tenure
Absolute Ownership (Scottish equivalent of English freehold).
Tenancy
The property is let to Nike Retail BV and has the benefit of a guarantee from Nike Europe Operations Netherlands BV. The lease is for 15 years from 1st November 2010 on full repairing and insuring terms at a commencing rental of £1,300,000 per annum. There are rent reviews every five years and a tenant’s option to break at the end of the tenth year.
About Nike
Nike is the world’s leading supplier of athletic shoes and apparel, and a major manufacturer of sports equipment with revenue in excess of US dollars 19 billion for the year ended 31st May 2010. The company employs over 30,000 people worldwide. Nike sponsors many high profile athletes and sports teams around the world, with the highly recognised trademarks of “Just Do It” and the Swoosh logo. In Europe Nike trades in over 20 countries.
VAT
Estimated rental value
The property has been elected for VAT and therefore VAT will be payable on the purchase price. However, it is anticipated that the sale will be treated as a Transfer of a Going Concern (TOGC).
Plant and equipment
Offers in excess of £24,500,000 (Twenty Four Million, Five Hundred Thousand Pounds) are sought for the Absolute Ownership in the property, subject to and with the benefit of the existing lease. A purchase at this level will reflect a net initial yield of 5.0% after allowing for purchaser’s costs at 5.8%.
Our analysis of the passing rent shows an overall rate of £40 per sq ft based on the GIA, or alternatively a Zone A rate (30 ft zoning pattern) of approximately £245 per sq ft. As recent evidence in Buchanan Street reflects a Zone A rate of £252 per sq ft, we are of the opinion that there is good potential for rental growth.
None of the systems or equipment in the store has been tested by the vendor’s agents. Purchasers may wish to make their own investigations to check that they are in working order.
Proposal
Image for illustrative purposes only
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BAM Properties
BAM Properties is known for high quality commercial developments.
We are the commercial property development arm of BAM Construct UK Ltd, a major construction services company with a turnover exceeding £1 billion per annum, which also engages in construction, design, facilities management and public private partnerships. BAM Construct UK is part of Royal BAM Group, a worldwide construction services company turning over almost €8 billion and listed on the Euronext Amsterdam. With staff based in offices throughout the UK, BAM Properties’ key strength is our nationwide reach combined with the detailed local knowledge of the market. Added to this is the backing and resources of the Royal BAM Group. BAM Construct UK has a long-standing association with Glasgow. Our construction division has delivered a number of outstanding projects and is currently working on the iconic Riverside Transport Museum. BAM Properties has developed outstanding retail and office buildings in the city with the most recent being Clarion on Wellington Street. BAM FM manages facilities in a series of schools in and around the Glasgow area.
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20 -26 Buchanan Street Glasgow
For further information please contact: Alex Culverwell
Charlie Barke
MISREPRESENTATION ACT 1967 and PROPERTY MISDESCRIPTIONS ACT 1991
John Hamilton
Cushman & Wakefield LLP, Culverwell and their clients, give notice that: (i) These particulars do not form part of any offer or contract and must not be relied upon as statements or representations of fact. (ii) No person in the employment of the agent(s) has any authority to make or give any representation or warranty whatever in relation to this property. (iii) Floor areas, measurements or distances given are approximate. Unless otherwise stated, any rents, or outgoings quoted are exclusive of VAT. (iv) Any descriptions given of the property cannot be taken to imply, it is in good repair, has all necessary consents, is free of contamination, or that the services and facilities are in working order. Interested parties are advised to carry out their own investigations as required. Publication Date: May 2011.