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Mercantile-Bothwell

News alert: Henderson acquires Mercantile House in Glasgow

Henderson Global Investors, on behalf of a private client, has acquired Mercantile Chambers in Glasgow for £5.2m. The price paid reflects a net initial yield of around 12%.

Henderson Global Investors, on behalf of a private client, has acquired Mercantile Chambers in Glasgow for £5.2m. The price paid reflects a net initial yield of around 12%.

The 71,759 sq ft office and retail property, at 53 Bothwell Street, comprises 62,406 sq ft of offices and 9,353 sq ft of retail. Arranged over basement, ground and seven upper floors, the ground floor provides retail accommodation with offices on the upper floors and car parking in the basement. The building has a Grade A listed façade in Art Nouveau style. It was acquired from KPMG, the administrator to a City Site Estates portfolio, which went into administration in April last year.

Tenants include J Sainsbury, Pret a Manger, Communities and Local Government and accountant Nelson Gilmour& Smith. The annual rental income is £680,093.

Cameron Fraser, fund manager at Henderson said: “This presented an excellent opportunity to acquire a value add opportunity with a very attractive yield, underpinned by the retail income with an average unexpired term of more than 8 years. Built in the late 1890s, with a 36% vacancy rate, the property offers the opportunity for active asset management, with the aim to reduce the vacancy, and improve rents, creating optimum potential for a significant upswing in value.

“Bothwell Street is widely recognised as a prime office location, particularly following the development of Grade A offices at 120 Bothwell St and 141 Bothwell St. Mercantile House is situated on the prime retail / leisure pitch of Bothwell St with significant footfall derived from its proximity to both Glasgow Central and Queen St railway stations, as well as the main retail destination of Buchanan Street.”

Phillips Roth& Co and London and Devonshire Trust acted for Henderson. Cushman & Wakefield advised KPMG on the sale.

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