Plans to transform the former Marks & Spencer store on Sauchiehall Street into student accommodation have moved a “step closer”, its developer has declared.

Fusion Group has completed the acquisition of the landmark building from the high-street giant in a deal worth £150 million.

The deal paves the way for the building to be transformed into a major mixed-use development, including 619 student beds and 9,500 square feet of new commercial space at street level via a new shopping arcade. This will restore a historic pedestrian route from Sauchiehall Street to Renfrew Street, Fusion said.

The deal provides a boost to hopes for the regeneration of Sauchiehall Street, which has suffered over recent years from the decline of the retail sector and, more recently, the after-effects of the Covid pandemic. The street has also been disrupted in recent months by major works to improve the public realm, which are expected to be largely completed before Christmas.

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Fusion’s acquisition of the site from M&S comes after the developer secured planning permission for the project from Glasgow City Council in July. An initial planning application from Fusion was refused by council chiefs in November 2023 amid concern it would lead to a “over-concentration” of student accommodation. However, revisions made by Fusion, including over the height of the building and inclusion of more affordable student beds, allowed the plans to proceed.

M&S announced the closure of the store in January 2022, handing a major blow to Sauchiehall Street following the loss of major retailers such as BHS and Watt Brothers in previous years.

Brodie Berman, senior acquisitions associate at Fusion Group, which has developed numerous purpose-built student accommodation projects across the UK, said: “We are delighted to announce the acquisition of the former Marks & Spencer store, bringing us a step closer to delivering our exciting proposals that will kickstart the regeneration of Sauchiehall Street.

“This deal reflects the strong partnership we’ve built with Marks & Spencer, and we are grateful for their cooperation and positive engagement throughout the planning and acquisition process.

“This landmark development will not only help to address the city’s shortfall in student accommodation but will also revitalise the local area, and we are excited to see the positive impact it will have on the city.”

Will Smith, property director at Marks & Spencer, said: “We are pleased to have reached this milestone and concluded the sale of our former Sauchiehall Street store.

“Delivering long-term activity on the site aligns with our estate renewal strategy, and we’ve worked hard to find the right partners to ensure its future success.

“We’re confident that Fusion Group’s vision will contribute positively to the regeneration of Sauchiehall Street and Glasgow city centre.”

Stuart Patrick, chief executive of Glasgow Chamber of Commerce, told The Herald: "This is highly encouraging news for Sauchiehall Street, and the business community warmly welcomes it. The mixed-use development will not only offer accommodation and commercial opportunities but also restore the pedestrian link between Sauchiehall Street and Renfrew Street.

"Revitalising Sauchiehall Street is essential for driving growth in the city centre’s economy and transforming an unused building into valuable assets reflects precisely the kind of investment we want to see more of in Glasgow.

"I congratulate the new owners and eagerly anticipate the progress of their plans."

A press statement noted that the purchase was funded by a loan provided by Octopus. Fusion was advised by TLT and Taylor Wessing, while Marks & Spencer received counsel from Dentons. The lender was represented by Memery Crystal and Lindsays.

James Nunn from Octopus said: “This marks the third loan we have provided to Fusion, and we are delighted to have played a role in supporting this key urban renewable project."

Steve Clinning from Memery Crystal said: “We are pleased to have supported Fusion Group and Octopus in this significant transaction. This development represents an exciting opportunity to regenerate Sauchiehall Street in Glasgow and foster a vibrant community. We are proud to have played a role in facilitating such an impactful project.”