Regional Offices

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ADDRESS 144 West George Street, Glasgow

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Location	Central Glasgow	Investment Date	June 2001
Transaction Type	Added Value Investment Minor refurbishment	Project Cost	£3.535m
Asset Type	Offices	Disposal Date	December 2005
Funding	Joint Venture with GE Capital	Sale Proceeds	£6.4m

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Transaction Summary / Opportunity

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Description: A freehold office building purchased from London Regional Transport Pension Fund. The building was acquired in a joint venture with GE Capital Real Estate.

Leased to a variety of tenants including Scottish provident and the Co-operative Insurance Society at historically low rent levels with differing covenant strength and different expirations, renewals and rent review dates.

Opportunity: to raise rental levels and improve the quality of tenants by upgrading the standard of the building.

Acquisition Method: Private Treaty

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Value Added

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• A team of consultants were engaged to refurbish the common parts, carry out repairs to the exterior and generally improve the look and feel of the building.
• An audit of tenants’ requirements was carried out, following which some tenants were able to expand and some were able to contract within the building on new leases.
• Surrenders and dilapidations were negotiated with some tenants following which refurbishment of the space was carried out; the space was then successfully leased out to new tenants.
• Rents were increased by 40% from acquisition date to sale date.
• Management of the building and management systems were improved to cater for the demands of the tenants.
• Generally repositioned the building to an institutional standard from what was considered a “tired office building.”