Exclusive

By Scott Wright

A TRIO of tenants have been secured by an independent Scottish property investment company for its latest development in the heart of Glasgow, amid signs that workers are drifting back to the city centre in growing numbers following Covid upheaval.

Corporate recovery specialist Begbies Traynor and Ossian Offshore Wind Farm Limited have respectively agreed four and five-year leases at 2-12 Bothwell Street in Glasgow’s central business district, following an extensive refurbishment of the property.

The companies will be joined by the latest venture from hospitality duo Andy and Emma MacSween, who are set to open a new wine and Negroni bar, Malo, on the ground floor in the spring. The bar will be a sister outlet to city establishments Vroni’s and Ralph & Finns.

The lettings have been secured by Scottish property firm Standard Real Estate, which has invested £1.5 million to refurbish the 19th century building since it was acquired from Mapeley in 2020. Standard Real Estate, which is owned by Hamish Munro and Scott Campbell, is planning further renovations at the property which would see the addition of category-A, full-furnished office suites with collaboration areas and meeting spaces.

The building at number 10 Bothwell Street is Grade-A listed and was originally built in 1849. The Bothwell Street properties are part of an extensive portfolio owned by Standard Real Estate in Glasgow, which includes 300,000 square feet of office space and 150,000 sq ft of industrial and leisure property.

The company owns 75,000 sq ft of office space in Aberdeen and has plans to expand in the Granite City and Glasgow over the next 12 to 18 months.

Other properties in the Standard portfolio include 22-24 Blythswood Square, 150-164 Bothwell Street (formerly occupied by Habitat), and the Standard Buildings at 94 and 102 Hope Street, all in Glasgow, plus Union Point Aberdeen.

John Grewar, who has been appointed by the firm to run its letting activities in Scotland, said: “Announcing Ossian Offshore Wind Farm and Begbies Traynor as new tenants is testament to the quality of 10 Bothwell Street’s refurbishment, as well as its incredibly central, connected location. The new high quality leisure operation in the lower ground floor will further enhance the tenant experience.

“When we purchased the site, we were highly aware that any refurbishment would need to be sympathetic to the building’s recognisable and elegant exterior, whilst bringing the building firmly back into use for occupiers who expect the absolute best in class. The building has new all electric air conditioning and has top quality ESG (environmental, social, and governance) credentials.

“The next stage of our refurbishment is to create new suites with collaboration and meeting areas, and we expect this to be completed by spring 2023.”

The development of 2-12 Bothwell Street comes as office workers are gradually returning to workplaces in town and city centres following nearly three years of disruption arising from the pandemic. Senior partners at law firm Lindsays recently told The Herald that the cost of domestic heating and electricity has emerged as an increasingly influential factor when people are deciding where to work, amid continuing concern over the cost-of-living crisis.

Mr Grewar said: “In general, employers are looking to get staff back to the office to increase productivity which has dipped for certain sectors.

“Securing better quality office space is one component of that strategy as well as offering flexible work packages.”

He added: “As companies have downsized due to flexible working, there has been a flight to quality. Many companies, particularly SMEs (small and medium-sized enterprises), have sought better quality working environments in order to retain and attract staff.

“Good quality offices with high environmental scores have performed particularly well.”

However, Mr Grewar said the lettings market has been affected lately by the worsening economic climate. “Larger transactions, particularly in Glasgow, have stagnated,” he said. “There is definitely a downturn in demand from larger occupiers. The year will probably show a high volume of transactions but reduced total take-up compared to previous years.”

Mr Grewar added: “The market has stalled, and higher interest rates are having a negative impact on the market. There is still a weight of money available but the main problem is the difference between sellers’ aspirations and purchasers’ expectations. There is still good demand for smaller, well-let investments and value-add opportunities.”