THE OPPORTUNITY
Licensed & leisure investment providing a superb return with clear growth potential through RPI linked rent reviews and better utilisation of the central square.
WAULT
Weighted Average Unexpired term of 12 years to lease end and 9 years accounting for tenant break options provides excellent investment longevity (licensed units only).
RENTAL
Total current net rental of £606,583 per annum, after payment of ground rental and deduction for unallocated service charge. We estimate a circa 6% increase over the next 5 years via RPI linked rental increases.
LICENSED CENTRAL COURTYARD
Currently used as a circulation area with intermittent events. The central courtyard would be an ideal opportunity to create a new lease to gain additional rental or dependent on the purchaser, an opportunity to operate the space directly. The courtyard benefits from a separate Premises Licence and is a substantial area extending to 707 Sq. M.
RETURNS
Based on the purchase price the investment will provide a purchaser with a Net Initial Yield at 11.44% with increase to 12% circa after RPI increased rent reviews, and further upside from better utilisation of the central square.
TENURE - NET RENTAL
The property is held on a long leasehold from Glasgow City Council, from 19 February 1998 until 18 February 2123. The rent is calculated annually based on 16% of the Gross Rent received.
COVENANT
D&B credit reports are available in the data room.
ENERGY PERFORMANCE RATING
Available upon request.
LEGAL COSTS
Each party will be responsible for their own legal costs in connection with the transaction.
VAT
Our clients have elected to waive 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).
PROPOSAL
We are instructed to seek offers in excess of £5,000,000 (FIVE MILLION POUNDS STERLING), exclusive of VAT for our client’s heritable interest subject to and with the benefit of the existing leases. A purchase at this level would show an attractive Net Initial Yield of 11.44% after allowing for standard purchaser’s costs with clear growth potential.
FURTHER INFORMATION
A full data room of information is available to seriously interested parties.
ANTI-MONEY LAUNDERING
To comply with the current anti-money laundering regulations, all parties of any qualifying transaction are required to undertake appropriate due diligence in advance of the transaction, including identifying and verifying all parties and establishing the source(s) and legitimacy of funding. All parties will be required to disclose all relevant information prior to conclusion of missives to enable all parties to meet their respective obligations under the Regulations. To comply with the current Anti Money Laundering regulations, all parties of any qualifying transaction are required to undertake appropriate due diligence in advance of the transaction, including identifying and verifying all parties and establishing the source(s) and legitimacy of funding. All parties will be required to disclose all relevant information prior to conclusion of missives to enable the agents to meet their respective obligations under the Regulation.
Location
Merchant Square is situated adjacent to the Candleriggs Quarter – one of the largest city centre development sites, outside of London. Sitting at the heart of the Merchant City, Merchant Square is moments from George Square, Queen Street and Central Stations, Strathclyde University, and the city’s core retail and commercial areas.
It is also a famous entertainment destination in its own right, having hosted Glasgow’s Hogmanay Party, The Merchant City Festival, live sport, a weekly makers’ market and much, much more.
THE OPPORTUNITY