Mountgrange Investment Management, the London-based firm, has completed a deal in conjunction with PRUPIM to buy a site in Glasgow, Scotland, for a £60 million €74 million; $95 million) speculative office development.
Mountgrange, which in investing on behalf of its Mountgrange Real Estate Opportunity Fund (MoREOF), a £300 million maiden private equity real estate vehicle, is buying a site at 1 West Regent Street. At the same time as completing the acquisition, the pair have appointed builder Sir Robert McAlpine to construct the project on the basis of a design and build contract.
In a statement, Mountgrange said it would deliver around 143,000 square feet of Grade A offices and retail space, giving a significant boost to Glasgow’s office market. It added that MoREOF and PRUPIM had acquired the site from Duddingstone House (Renfield Street) Limited.
The development site is located in the central core of Glasgow, near to Queen Street station and adjacent to the Buchanan Street retail scheme, the city’s premier shopping area.
The development will be the first significant Grade A office building started in Glasgow’s central business district in nearly five years and will “seek to address the shortage of centrally located, modern Grade A offices”, according to the firm.
Nick Berry, partner at Mountgrange Investment Management, commented: “We have identified Glasgow as a prime target for commercial investment and believe this provides an excellent opportunity to respond to the shortage of Grade A space in the heart of the city.”
Demolition is expected to commence on site shortly, which will be completed by the end of the year. Mountgrange will oversee the development of the 10-storey building which is expected to be completed in December 2014.
This is the fourth investment by MoREOF in Scotland. It follows on from the joint acquisition this week of a portfolio of 24 office, industrial and retail properties Henderson Casper LLP yesterday which included three properties in Scotland. It also trails the acquisition of land in Aberdeen for office, industrial and distribution space in May 2012, and previously an investment in a major residential development site in Edinburgh.