PRIME LEISURE INVESTMENT IN THE HEART OF GLASGOW

FOR SALE

GLASGOW

02

GLASGOW

• Glasgow is one of Europe’s most exciting and vibrant cities and the largest in Scotland

• Rare opportunity to acquire the only exclusive leisure scheme in Glasgow city centre

• Situated a few minutes’ walk from George Square, Queen Street Station, Strathclyde University and the core retailing/office areas of the city centre

• There are approximately 130,000 students in Glasgow, ranking it 3rd in the UK in terms of numbers

• Merchant Square comprises a multi-let leisure destination positioned around a covered courtyard

• Located adjacent to Candleriggs Quarter, the UK’s biggest city centre development site outside of London, and Glasgow’s most exciting site

• Recent substantial developments in the area include Strathclyde University’s £90 million Technology and Innovation HQ and the £200 million Collegelands project

• Grade A listed building - no vacant rates

• Long Leasehold expiring 2123 – Head rent geared to 16% of Gross Rent received

• Current Net Rent of £737,689 per annum

• Net ERV of £767,887 per annum

• Opportunity to drive the rent roll based on the recent O’Neill’s rent review award and agreements

• WAULT to expiry 16.1 years (10.0 years to break)

• Our clients are seeking offers over £8,135,000 (EIGHT MILLION ONE HUNDRED AND THIRTY FIVE THOUSAND POUNDS STERLING) exclusive of VAT which reflects a net initial yield of 8.50%, a reversionary yield of 8.85% (based on standard purchaser’s costs) and a low capital rate of only £105 per sq ft

Investment Summary

03

SAUCHIEHALL ST

GLASGOWCENTRALSTATION

QUEEN STREETSTATION

ST ENOCHSUBWAY

ST ENOCHSHOPPINGCENTRE

GOMA

GEORGESQUARE GLASGOW

CITY CHAMBERS

CITY OF GLASGOWCOLLEGE

BUCHANAN GALLERIESSHOPPING CENTRE

GLAS

SFOR

D ST

HUTC

HESO

N ST

MILL

ER ST

BRUN

SWICK

ST

QUEE

N ST

GEORGE ST

GEORGE STGORDON ST

N HAN

OVER

ST

CAND

LERIG

GSAL

BION S

T

HIGH S

T

WEST

NILE

ST

RENF

IELD S

TST VINCENT ST

WEST GEORGE ST

WEST REGENT ST

BATH ST

CATHEDRAL ST

INGRAM ST

UNIVERSITY OFSTRATHCLYDETHE TECHNOLOGY& INNOVATIONCENTRE

UNIVERSITY OFSTRATHCLYDE STRATHCLYDE

STUDENT HALLS

STRATHCLYDESTUDENTACCOMMODATION(ANDREW URE)

GLASGOWCROSS

BUCHANAN STSUBWAY

UNITE STUDENTACCOMMODATION

ARGYLE ST

BUCH

ANAN

ST

St Enoch NewCentre Development

CandleriggsDevelopment Site

Glasgow is the largest city in Scotland, the commercial and industrial capital of the country and the administrative centre for the West of Scotland. The city has an urban population of approximately 625,000 people and a catchment population of over 2.8 million people within a 40 minute drive, making Glasgow the third largest urban centre in the UK. The city benefits from 2 main train stations; Central Railway Station and Queen Street Railway Station both of which provide regular services to London and link to the wider Scottish Railway Network.

Glasgow is Scotland’s centre of employment and an economic powerhouse, generating £18 billion in gross value each year. There are 1.2 million working age people within a 45 minute commute of the city and 2 million within an hour. The city is home to an impressive list of blue chip companies and major global organisations across numerous sectors including Santander, Morgan Stanley, The Student Loans Company, KPMG, Ministry of Defence, BT, Aggreko, Scottish Power, Scottish & Southern Energy, Barclay’s and JPMorgan Chase & Co.

With over half a million square metres of retail space, Glasgow is the largest UK shopping destination outside London. It is also the most successful, ranking 2nd in CACI’s UK Retail Ranking and placing it in the top 20 super league of major European shopping destinations by commercial expenditure. Within a 30 minute drive time from Glasgow, the comparison goods spend is £4.85 billion per annum whilst convenience expenditure is £5.23 billion per annum. The city is ranked as having the highest catchment spend available out of the top UK retailing centres.

Glasgow

04

MERCHANT SQUARE

Glasgow’s Famous Golden Z Retailing Pitch

Greater Glasgow has a superb education base and boasts5 universities and 3 super colleges educating some 130,000students from 135 countries, ranking third in the UK in terms of number of students. Employers are attracted by the level of qualifications job applicants have achieved, with almost 40% of Glaswegians having NVQ3 and above. This is higher than any other comparable city.

EducationMerchant Square is situated within Glasgow City Centre, a short walk from the bustle of the busy retailing thoroughfares of Buchanan Street and Argyle Street.

Dating back to the 1800s, Merchant Square is housed in the part of Glasgow’s Old Fruitmarket in the heart of Merchant City.

Situation

with a comparison goods spend of over £6.6 billion. Annual catering spend of £372m

(Glasgow City Council 2019)

Glasgow’s Interesting Stats & Facts

A CATCHMENT OF 2.8M PEOPLE

Furthermore, 2.2m tourists of which 31% visit the City each year, adding a spend of £619m to the local economy

‘STYLE MILE’ COMMANDS A FOOTFALL

OF 50M ANNUALLY.

The city centre`s vibrant shopping

of population degree educated or higher

31%

Glasgow named

BEST RANKED CITY TO LIVE FOR

MILLENNIALSAccording to Independent research,

click here to find out more

05

of population aged between 18 - 35.

32.9%

as part of the Glasgow City Region Deal

£1.13 BILLION

Glasgow is to benefit from an investment of approximately

06

Glasgow CentralTrain Station Buchanan Galleries

Shopping Centre

University of Strathclyde

University of Strathclyde Student Accommodation

University of Strathclyde Student Accommodation(Andrew Ure)

Unite StudentAccommodation

CollegelandsStudent Campus

GlasgowCaledonian University

Queen StreetTrain Station

High StreetTrain Station

Buchanan StreetSubway Station

St EnochSubway Station BUCHANAN STREET

GEORGE SQUARE

INGRAM STREET

RIVER CLYDE

CANDLERIGGS

BELL STREET

WILSON STREET

CUSTOM HOUSEDEVELOPMENT

• 294 bed Clayton Hotel• 162 bed Adagio Aparthotel

• Under construction

CANDLERIGGS DEVELOPMENT

• 850,000 sq ft of residential, student, hotel and commercial space

• Planning approved

ST ENOCH CENTRE NEWDEVELOPMENT

• £40 million investment• 100,000 sq ft new retail

& leisure• 9 screen Vue cinema TRONGATE SERVICED

APARTMENTS DEVELOPMENT

KING STREET CAR PARKDEVELOPMENT SITE

HOTEL DEVELOPMENT• 250 bed Premier Inn Hotel

• Opens Summer 2020

ARGYLE STREET

SAUCHIEHALL STREET

Argyle StreetTrain Station

St EnochShopping Centre

Glasgow’s Famous Golden Z Retailing Pitch

GLASGOW

University of StrathclydeInnovation Centre

GET LIVINGBTR SCHEME

Merchant Square comprises a Grade A listed multi-let leisure destination positioned around an internal covered courtyard. The property includes multiple bars, restaurants, nightclubs a gaming arena and offices on the upper levels.The courtyard hosts weekly craft markets and events throughout the year.

Once a merchant’s market, the indoor venue is now a stylish andsophisticated destination for eating, drinking and entertainment.

Description

07

Merchant Square & EventsMerchant Square is a long established venue for hosting some of Glasgow’s most popular events. It is regarded as one of the best venues in the city for hosting conferences and dinner parties, with capacity for approximately 1,600 people.

It is the main venue for the annual Merchant City Festival, a wonderful celebration of creativity which brings carnival to the streets and venues in the heart of Glasgow. It also hosts an annual Hogmanay Party, which has become one of the main events in Glasgow’s calendar year.

There are 7 events booked in for 2020 with discussions ongoing for several more. The 2020 events will generate a minimum of £12,850. For more information on events at Merchant Square, check out the website; www.merchantsquareglasgow.com

08

Existing Occupiers

VIN-CRU (UNIT E)Vin-Cru is a new casual wine bar due to open in Merchant Square on 28th November 2019. The people behind it are owners of two of Glasgow’s most popular culinary institutions: Dennistoun Bar-B-Que and The Hug and Pint.

METROPOLITAN (UNIT F)One of Merchant City’s most popular venues. A cocktail bar and restaurant with a great reputation for lively nights. A stylish and contemporary fit out.

MONTEREY JACK’S (UNIT 1,2 & 3)Monterey Jack’s serves up American inspired gourmet burgers. They won Best Burger Scotland Award 2019 - 2020. They now have nine restaurants across Scotland.

O’NEILL’S (UNIT A)A Mitchells & Butler themed Irish sports bar. Offers a variety of live music, food and sporting events.

BAR SQUARE (UNIT C & D) A popular bar and food venue with a large courtyard area and a lively atmosphere.

BAR SOBA (UNIT 6,7 & J)A stylish Asian inspired bar and restaurant. Offers high quality fresh food, cocktails and a vibrant atmosphere.

FANELLI’S (UNIT 4 & 5)An Italian family restaurant with a menu featuring all the classic dishes. Benefits from a seated terrace and a balcony which can be hired out for party events.

BEER CAFE (82 CANDLERIGGS)Award winning bar for having the best selection of beers in Scotland. Stocks a wide range of beers from all around the world.

ESCAPE REALITY (BASEMENT)Offers a unique escape room experience with expertly created themed rooms that have some of the most advanced special effects in the UK. The venue enjoys a private bar for guests. Rated the No 1 thing to do in Glasgow on Tripadvisor.

STEAK, CATTLE & ROLL (UNIT B)American inspired menu from an independently owned Glasgow business. They have a second premises onSauchiehall Street.

DISTRIKT (CLUB 2)Distrikt is a speciality club offering booth and waitress service within a contemporary fit out and ambiance.

JUNGLE RUMBLE (CLUB 1)Jungle Rumble is one of the top adventure golf operators in the UK with 4 existing sites and several more in development.

09Ground Floor

Public Toilet

VIN CRU

BEER CAFE

MONTEREYJACK'S FANELLI'S

FANELLI'SBALCONY

MERCHANT SQUARECOURTYARD

BAR SOBA

BAR SOBABALCONY

O'NEILL'S

CLUB 1

STEAK, CATTLE& ROLL

STEAK, CATTLE & ROLLBALCONY

METROPOLITAN

BAR SQUARE

METROPOLITANBALCONY

BEER CAFEBALCONY

MONTERY JACK’SBALCONY

BAR SQUAREBALCONY

MCPL

METROPOLITAN

MONTEREYJACK'S

MONTEREYJACK'S

BALCONY

FANELLI'SFANELLI'SBALCONY

BAR SOBA

BAR SOBABALCONY

STEAK,CATTLE& ROLL

METROPOLITANBALCONY

METROPOLITAN ESCAPE REALITY

BAR SOBA

BAR SQUARE

BARSQUARE

DISTRIKT

BEER CAFE

STEAK,CATTLE &

ROLL

OFFICES

VIN CRU

CLUB 1

First Floor

Basement

Floor Plans

It is an exciting time for Glasgow with huge levels of investment helping to promote positive change, growth and vibrancy in this historic district of the city. The city centre has seen a resurgence following significant investment made in conjunction with the 2014 Commonwealth Games. The momentum created continues and below is a sample of the developments planned.

NEW BTRGet Living has secured planning consent for Scotland’s largest BTR scheme - 727 units behind High Street Station, located 500 metres from Merchant Square.

COLLEGELANDS DEVELOPMENTCollegelands is part of a £200m development project.The development comprises 588 student study bedrooms.

NEW HOTEL DEVELOPMENTSThere are numerous hotel developments under construction and planned within and surrounding the Merchant City including:

• 250 room Premier Inn at St Enoch Square which will complete in 2020.

• 204 room Citihome Aparthotel granted permission November 2019.

• Custom House, a waterfront development comprising a 294 room hotel operated by Dalata and a 162 bed Aparthotel operated by Adagio.

• Plans approved for 157 room Aparthotel at the junction of Trongate and Hutcheson Street.

CANDLERIGGS QUARTERThe new Candleriggs Quarter is directly opposite the Merchant Square. It is the UK’s biggest city centre development outside of London and has consent for 850,000 sq ft of residential, student, hotel and commercial space. Drum Property Group formed a joint venture with Stamford Property Investments earlier this year to take this exciting project forward. The current planning permission is granted for:

• 132 high quality apartments• 435 new flats for rental• 586 rooms of student accommodation• 123 room hotel• Over 60,000 sq ft of retail accommodation

A new planning application was made in December 2019 to expand the existing consent to include leisure, gym, event business space and public houses. Work to clear the site and demolish unlisted buildings has commenced.

10

City Centre Resurgence

CANDLERIGGS QUARTER

11

QUEEN STREET STATIONA £104 million upgrade of Queen Street Station will create a landmark, modern station reflecting its role as a gateway to Glasgow. The east side of the building will become an extension to Buchanan Galleries and it will create new passenger facilities over 2 levels. The public floor space will be doubled in size and platforms extended. Construction is already underway with completion targeted in 2019.

110 & 100 QUEEN STREET110 Queen Street comprises 9 floors of office accommodation extending to 143,000 sq ft where rents of £29.50 psf have been achieved and 20,000 sq ft of retail space. Office tenants include – ACCA, Brodies LLP, DWF LLP, Deloitte LLP, Grant Thornton UK LLP and WSP. Retail tenants include – Armani and Gant.

Completed in March 2017, 100 Queen Street is a high quality office refurbishment extending to 54,000 sq ft providing 6 floors of office accommodation and 4 retail units.

GARMENT FACTORYRecently refurbished award winning office scheme extending to 48,000 sq ft located in the heart of the vibrant Merchant City, only a 2-minute walk from Merchant Square.

ST ENOCH CENTREConstruction has started on a £40m leisure development at one of Glasgow’s largest shopping centres. The redevelopment will add 30,000 sq ft to the centre and include a cinema, retail outlets and restaurants. It is scheduled to be opened by the summer of 2020.

KING STREET CAR PARK DEVELOPMENTThis landmark gap site is currently being explored by Holmes Miller with the intention of creating a new and vibrant mixed-use scheme.

GLASGOW

City Centre ResurgenceContinued...

Tenancies & AccommodationUNIT TENANT GIA

(SQ FT)

ADJUSTED GIA

(SQ FT)RENT PA RATE

(PSF) ERV PA ERV RATE(PSF)

LEASE START EXPIRY BREAK

OPTIONNEXT

REVIEW COMMENT

Unit AMitchells &

Butlers Retail Ltd t/a O'Neill’s

GR - 6,842CY - 540T - 7,382

7,382 £157,000 £25.00 £157,000 £25.00 06/07/1998 05/07/2048 06/07/2023 28/05/2023• 2018 rent review settled by Arbitration. Rental rate of

£25.00 psf awarded with an end allowance for quantum at 13.5%. 6 months notice required on TBO.

Unit BFinn Group Ltd

t/a Steak, Cattle & Roll

GR - 1,764CY - 1,0251st - 455

Base - 786T - 3,244

3,060 £72,500 £23.69 £76,500 £25.00 28/05/2010 27/05/2035 28/05/2025 28/05/2020

• MBO 28/05/2025 giving 6m notice. • Lease stated area used for s/c. • Deposit £18,125• Included Additional Basement Space at Nil Rent.

Unit C & D Margaret Latimert/a Bar Square

GR - 2,381CY - 779

Base - 1,298T - 4,458

3,420 £80,000 £23.39 £85,500 £25.00 17/10/2001 16/10/2038 28/08/2022 • 5 yearly rent review.

Unit E Vin Vin Vin Limitedt/a Vin Cru

GR - 916Base - 173T - 1,089

951 £30,000 £31.56 £30,000 £31.56 08/10/2019 07/10/2034 08/10/2024

• 3 months rent free.• £7,500 rent deposit held for duration.• RR to higher of OMV or RPI.• Schedule of condition.

Unit FM-City Bar &

Restaurant Ltd t/a Metropolitan

GR - 2,563CY - 1,1051st - 4,973Bal - 1,403

Base - 2,488T - 12,532

5,830 £128,750 £25.00 £128,750 £25.00 03/05/2002 27/11/2033 28/11/2018• The 2018 rent review was agreed at £25.00 psf, less an end

allowance of 13.5% for quantum. Tenant has an option to extend by 5 years at expiry.

82 Candleriggs HBCBar Limited t/a Beer Cafe

GR - 1,597CY - 301

Base - 977T - 2,875

2,093 £42,000 £20.06 £52,325 £25.00 08/07/2002 30/06/2037 28/05/2022 • Review to OMV.

Unit 1, 2 & 3

Monterey Jacks Glasgow (Central)

Limited t/a Monterey Jacks

GR - 1,562CY - 725

1st - 1,193Bal - 645T - 4,125

2,779 £60,000 £21.59 £69,475 £25.00 13/11/2018 12/11/2033 13/11/2023

• 6 months Rent Free.• Review upwards only to higher of OMV or RPI.• £30k rent deposit. 50% of deposit returned end of yr 1.

Balance returned no earlier than end of yr 2 if net profit is double passing rent.

Unit 4 & 5Italiano Glasgow

Limitedt/a Fanelli’s

G - 1,045CY - 798

1st - 1,389Bal - 663T - 3,895

2,389 £55,000 £23.02 £59,725 £25.00 19/06/2019 28/04/2031 29/04/2021

• Service charge cap at £20,000 grown at RPI - no shortfall. • RR to higher of OMV or RPI. • Tenant option to extend by 5 years subject to 9 months

notice (TOE).• £19,500 deposit to be built up. £5,833 upfront followed by 8

months instalments of £1,458.34.

Unit 6, 7 & J SMS Leisure Ltd t/a Bar Soba

G - 2,857CY - 7291st - 587Bal - 558

Base - 980T - 5,711

4,096 £90,000 £25.00 £90,000 £25.00 03/03/2015 02/03/2035 03/03/2025

• Rent increased from £70,000 pa wef 2020 review date. • Guarantee from SWE Leisure Limited. • 03/03/2020 rent review agreed at £25.00 psf less end

allowance of 12.12% for configuration (previous rent was £70,000).

12

Tenancies & AccommodationUNIT TENANT GIA

(SQ FT)

ADJUSTED GIA

(SQ FT)RENT PA RATE

(PSF) ERV PA ERV RATE(PSF)

LEASE START EXPIRY BREAK

OPTIONNEXT

REVIEW COMMENT

Courtyard Space

SMS Leisure Ltd t/a Bar Soba CY - 277 277 £5,000 £18.05 £6,925 £25.00 11/01/2016 02/03/2035 03/03/2020 • Rolling 1 month landlord only

break option.

Main Basement Room 1

Escape Gaming Ltdt/a Escape Reality B - 3,746 3,746 £29,000 £7.74 £29,000 £7.74 10/10/2016 09/10/2026 10/10/2021

• Guarantee from Nocturnal Capital Ltd.• TBO on 5th anniversary of lease with 6m prior written

notice.• 6m RF from 10/10/2021.• S/c capped at £8,000 pa which is grown at RPI.• Rental deposit of £7,250 + VAT held (£8,700).• Schedule of condition.

Club 1Jungle Rumble

(Merchant Square) Ltd

G - 213B - 8,606T - 8,819

£50,000 £5.67 £50,000 £5.67 tbc 15 years 5 yearly

• New 15/5 lease in legals. • Stepped rent, Yr 1) £45k Yr 2) £46.25k Yr 3) £47.5k Yr 4)

£48.75k Yr 5) £50k. 5 yearly reviews to OMV. Vendor to top up.

• 3 month deposit.

Club 2 / Unit QCPS Entertainment

(Glasgow) Ltd t/a Distrikt

B - 2,760 £23,000 £8.33 £23,000 £8.33 01/11/2014 31/10/2029 01/11/2024 • Lease states premises is exactly 2,670 sq ft for service charge.

MCP Office - 1st Floor & Basement

M-City Bar & Restaurant Ltd

1st - 872B - 746

T - 1,618872 £10,250 £11.75 £10,250 £11.75 20/01/2016 19/01/2023 20/01/2021 • TBO on 6 months notice.

• Right to use Basement Storage Area.

MCP Office - 2nd Floor

M-City Bar & Restaurant Ltd 872 872 £10,250 £11.75 £10,250 £11.75 20/01/2016 19/01/2023 20/01/2021 • TBO on 6 months notice.

ATM Note Machine £15,451 £15,451 02/10/2018 01/10/2021• 4 year average net income. • Annual rent 11p per transaction.• TBO anytime on 3 months notice.

Courtyard Craft Market 13,070 £20,000 £20,000 • 4 year average net income.

TOTAL 77,747 £878,201 £914,151

13

Our rental analysis is based on applying the following reduction factors to the GIA; Bsmt 20%; GF 100%; CY 100%; 1st 25%; Balcony 30%. Club 1 & 2 (Unit Q) and Escape Rooms are analysed on a traditional GIA basis.

WAULT to expiry 16.1 years (10.0 years to break).

Headrent @ 16% of Gross Rent received £140,512 £146,264

Net Rent / ERV £737,689 £767,887

Each party will be responsible for their own legal costs in connection with the transaction.

The property is held on a long leasehold from Glasgow City Council from 19/02/1998 until 18/02/2123. The rent is calculated annually based on 16% of the Gross Rent received.

Our clients have elected to wave exemption for VAT and accordingly VAT will be payable on the purchase price, although we anticipate the sale will be dealt with by way of a Transfer of a Going Concern (TOGC).

D&B credit reports are available in the data room.

Tenure VAT

Covenant

Legal CostsAvailable upon request.

EPC Our clients are seeking offers over £8,135,000 (EIGHT MILLION ONE HUNDRED AND THIRTY FIVE THOUSAND POUNDS STERLING) exclusive of VAT which reflects a net initial yield of 8.50%, a reversionary yield of 8.85% (based on standard purchaser’s costs) and a low capital rate of only £105 per sq ft.

ProposalAccess can be provided to a data room.

Data Room

14

Viewing & Further InformationPlease contact the joint selling agents:

Sheridan Property Consultants for themselves and for the vendors or lessors of this property whose agents they are give notice that: (i) the particulars are set out as a general outline only for the guidance of intending purchasers or lessees, and do not constitute, nor constitute part of, an offer or contract; (ii) all descriptions, reference to condition and necessary permission for use and occupation, and other details are given without responsibility and any intending purchasers or tenants should not rely on them as statements or representations of fact but must satisfy themselves by inspection or otherwise as to the correctness of each of them and are advised to do so; (iii) no person in the employment of Sheridan Property Consultants has any authority to give representation or warranty whatever in relation to this property; (iv) all prices, rents and premiums quoted are exclusive of VAT at current rate; February 2020.

Stewart Sheridanstewart@sheridanproperty.co.uk 07740 940 898

Cathal Keanecathal@sheridanproperty.co.uk07808 627 224

Sheridan Property Consultants37 One37 George Street Edinburgh EH2 2HN

Tel: 0131 300 0296

Graeme Millargraeme@sheridanproperty.co.uk07523 512 804

Noel Tiffneynoel@sheridanproperty.co.uk07870 999 799

Savills163 West George StreetGlasgowG2 2JJ

Tel : 0141 248 7342

For queries on management please contact:

Niall Joycenjoyce@savills.com0141 222 4116

GLASGOW