IBERICA 140 ST VINCENT STREET GLASGOW

PRIME LEISURE INVESTMENT OPPORTUNITY IBERICA | 140 ST VINCENT STREET | GLASGOW

INVESTMENT SUMMARY

A RARE OPPORTUNITY TO PURCHASE A PRIME LEISURE INVESTMENT WITHIN GLASGOW’S PRIME CBD

Glasgow is regarded as the second most The property is let to Iberica Food important and largest retail market in and Culture Limited (t/a Iberica) until 07 June 2041, providing an the UK after the west end of London, unexpired this is confirmed by its consistent number 2 term of 24 years. position in the CACI UK retail rankings. Passing Rent of £90,000 per annum subject to 5 yearly upwards only rent Glasgow is the largest city in Scotland reviews. The passing rent equates to a low and one of Europe’s most dynamic and rate of £21.36 per sq ft based upon an vibrant cities with over £4.85bn of adjusted GIA of 4,213 sq ft. comparison goods spend available in the catchment area. Heritable Interest (Scottish equivalent of English Freehold).

St Vincent Street forms a key part of the We are instructed to seek offers in excess Glasgow’s prime leisure pitch and is the of £1,420,000 exclusive of VAT for our undoubted prime office pitch within the client’s heritable interest. CBD. Notable leisure entrants include YO! Sushi, Byron Burger, , Bella A purchase at this level would provide a Italia, Revolución De Cuba, Handmade Net Initial Yield of 6.00%, allowing for purchasers costs of 5.61%. Burger Co., Cote Brasserie, Hard Rock Café, Bill’s, and Carluccio’s. Glasgow’s leisure and restaurant market has experienced has experienced considerable 140 St Vincent Street is a striking grade growth in recent years, and with the , which was A-listed landmark property prime rent now at £41.64 per sq ft (net extensively refurbished internally by the effective), the property has strong rental Tenant in 2016. growth prospects. IBERICA | 140 ST VINCENT STREET | GLASGOW IBERICA | 140 ST VINCENT STREET | GLASGOW IBERICA | 140 ST VINCENT STREET | GLASGOW

GLASGOW VIBRANT CITY LOCATION

GLASGOW IS THE LARGEST CITY IN Glasgow has a dynamic and modern In 2014 Glasgow hosted The mixed economy focusing on business and Commonwealth Games, the Ryder Cup SCOTLAND AND THIRD LARGEST IN financial services, a sector which has grown and the MTV European Music Awards. The THE UK, WITH A POPULATION OF significantly over recent decades. With a City is a world class location for film and median age of 34, Glasgow has a young TV production with major international 650,000 AND APPROXIMATELY population. Businesses have access to a pool productions such as World War Z, Cloud of over 400,000 workers in Glasgow (NOMIS) Atlas the Fast & Furious 6 and Outlander 3 MILLION PEOPLE IN THE GREATER and a further two million are within an hour’s filmed on location here. These events GLASGOW CONURBATION. THIS commute, making the City attractive to cement Glasgow’s reputation as one of the corporate occupiers such as Barclays most vibrant and dynamic cities in Europe. ACCOUNTS FOR OVER HALF OF Bank, Santander, JP Morgan, Morgan SCOTLAND’S TOTAL POPULATION. Stanley, SSE and Scottish Power. The city The City’s economy is bolstered by a is one of the world’s 75 Best performing growing tourism sector, attracting 2.87 million tourists annually, generating £687 The City has the largest economy in Scotland Financial Centres and the third most million for the local economy – almost a and contributes substantially to the UK important financial centre in the UK (Global quarter (23%) of visitors are from overseas economy. Glasgow is Scotland’s first City to Financial Centres Index, 2015). with the largest proportions from the USA, secure the UK Government’s City Deal worth The state of the art SSE Hydro National Germany, France, Australia, Netherlands, £1.3 billion and is the first City in the UK to Arena opened in August 2013 and is the Italy and Canada. implement the Tax Increment Financing (TIF) second-busiest music arena in the world scheme. The City generated nearly £19.6 in terms of ticket sales, behind only billion in Gross Value Added to the Scottish (Sources: ONS; Glasgow Retail Prospectus). London’s The O2 Arena. This makes the economy in 2015, outperforming the UK arena busier than Manchester’s Manchester average by more than a third. Arena and the famous Madison Square Garden in New York. IBERICA | 140 ST VINCENT STREET | GLASGOW

RETAILING AND LEISURE IN GLASGOW LEISURE

RETAIL Over 5.3 million square feet of retail space BUCHANAN GALLERIES is Glasgow’s Glasgow’s leisure and restaurant market has experienced can be found in Glasgow, with prime and prime covered shopping centre. It is considerable growth over the past 24-36 months and a Glasgow is the second largest and super prime shopping to be had within one anchored by John Lewis, Next and Boots number of high-profile occupiers have entered the market, most important retail market in the uk square mile in the city centre. Glasgow’s and boasts fashion brands such as River driving exceptional rental growth in the sector. after London’s west end. retail core follows a contiguous Z shape in Island, Hollister and Mango as key tenants. what is known as the ‘Golden Z’ comprising Land Securities have plans to extend the The demand for high profile well-located leisure units has The city is consistently ranked number 2 in Sauchiehall Street, Buchanan Street and centre in the near future. surged in recent years and a number of new bars, restaurants the CACI retail rankings and PROMIS Market Argyle Street. and cafés have opened on Glasgow’s prime leisure pitch Analysis ranks the city number 1 on the ST. ENOCH’S CENTRE was extensively which comprises St Vincent Street, St Vincent Place, West following bases: BUCHANAN STREET is the undoubted prime refurbished in 2010 at the cost of £150m George Street and West Nile Street. retailing thoroughfare in Glasgow and and now comprises 1 million sq ft of retail attracts predominately upmarket aspirational and leisure space. Major tenants include 2.89M fashion occupiers. The street welcomes 91m Debenhams, H&M, Hamley’s, JD Sports, PRIMARY CATCHMENT POPULATION Notable entrants include: shoppers per year and has one of the UK’s Boots and Superdry. strongest flows of footfall, second only to YO! SUSHI, FIVE GUYS, GOURMET BURGER 842,000 Oxford Street in London, with 6,600 people PRINCES SQUARE recently underwent KITCHEN, VAPIANO, BYRON BURGER, , ESTIMATED SHOPPING POPULATION per hour on Buchanan Street. a £7.5m refurbishment and is home to some of the city’s high-end fashion retailers REVOLUCIÓN DE CUBA, ., The retail core and it surrounds is enhanced including Belstaff, COS, Ted Baker and COTE BRASSERIE, HARD ROCK CAFÉ, BILL’S, LAS £4.95BN by the presence of three covered shopping COMPARISON RETAIL SPEND AVAILABLE Vivienne Westwood. The centre is also one malls, namely Buchanan Galleries, Princes IGUANAS AND CARLUCCIO’S. IN THE CATCHMENT of the most popular city centre destinations Square and the St. Enoch centre. for eating and drinking. ADDITIONALLY, THERE LATENT IS DEMAND CACI UK RETAIL RANKINGS 2016 – TOP 10 FROM MILLER & CARTER, PHO CAFÉ, BE AT ONE AND TAPAS REVOLUTION. UK RANK RF CENTRE RF SCORE TOTAL CENTRE COMPARISON SPEND (£M)

1 London - West End 9,306 £4,772.8 GLASGOW IS RANKED 2 Glasgow 3,960 £1,900.8 IN THE TOP 20 IN THE 3 Manchester 3,427 £1,815.1 4 Birmingham 3,150 £1,599.0 SUPER LEAGUE OF 5 Leeds 2,950 £1,416.8 MAJOR EUROPEAN 6 Liverpool 3,131 £1,316.7 SHOPPING CENTRES BY 7 Westfield Stratford City 2,585 £1,304.9 8 Westfield London 2,594 £1,293.6 COMPARISON SPEND. 9 Bluewater 2,431 £1,233.2 10 2,167 £1,228.1 Glasgow Central IBERICA | 140 ST VINCENT STREET | GLASGOW IBERICA

140 ST VINCENT STREET GLASGOW

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SITUATION F IBERICA

140 ST VINCENT STREET GLASGOW PRIME LOCATION

The Property occupies a prime location on A St Vincent Street at its junction with Hope Street, in the heart of the Central Business District (CBD) of Glasgow City Centre, which houses circa 16 million sq ft of office 16 accommodation. B 17 15 Nearby occupiers on St Vincent Street 13 include Martha’s, Bread Meats Bread, 14 8 Topolobamba, Pizza Punks, Chaakoo and 18 1 Handmade Burger Co., and the surrounding 12 pitch comprising St Vincent Street, West Nile 9 Street and West George Street is established 11 20 10 as Glasgow’s prime leisure core. 6 The property is well located for access to E 7 2 the services and amenities of Glasgow City 19 4 Centre as well as local transport connections. 3 It is within 200m/3 minutes’ walk of Glasgow 5 Central Station and within 500m/7 minutes’ walk and 750m/9 minutes’ walk of Glasgow Queen Street Station and Buchanan Bus Station respectively.

C

OCCUPIERS PLACES

1. YO! Sushi 8. Grill On The Corner 15. Handmade Burger Co A St Vincent Street E Buchanan Galleries Queen Street 2. Martha’s 9. 16. Buchanan Street Princes Square St Enoch Underground 3. 10. Byron 17. B F 4. Halloumi 11. Revolución de Cuba 18. Chaophraya C Sauchiehall Street G St Enoch Centre Buchanan Street Underground 5. Mussel Inn 12. Bread Meats Bread 19. Smoke Barbecue D Argyle Street Central Station 6. Mozza 13. Topolabamba 20. Giraffe 7. Tony Macaroni 14. Pizza Punks IBERICA | 140 ST VINCENT STREET | GLASGOW

THE PROPERTY

DESCRIPTION TENANCY TENANT PROFILE

140 St Vincent Street comprises the ground The Property is let to Iberica Food and Iberica Food and Culture Limited currently The company has been awarded a Dun and basement floors within a six storey Culture Limited, trading as Iberica for a term operates eight restaurants in the UK, five & Bradstreet rating of 2A2. This rating late Victorian Renaissance Grade A listed of 25 years from 08 June 2016, expiring of which are located in London with the represents a lower than average risk of sandstone building which was designed by on 07 June 2041. The rent is subject to remaining three in Glasgow, Manchester business failure and financial strength based Burnet and Boston, in circa 1900. a stepped agreement during the first 5 and Leeds and we understand that they on a tangible net worth of £2.32 million years of the lease, for which the vendor will have plans to open more restaurants in the The property is self-contained and A comparison between the two most recent provide a full rental top-up to 90,000 p.a. near future. independently accessed from the main published financial accounts for the years building, with dedicated entrances on both Thereafter, the rent is subject to 5 yearly For further information on Iberica, to 2014 and 2015 is set out below and St Vincent Street and Hope Street. upwards only open market rent reviews. please click on the link: illustrates a significant improvement in www.ibericarestaurants.com performance: THE PROPERTY WAS EXTENSIVELY ENERGY PERFORMANCE CERTIFICATE REFURBISHED AND LUXURIOUSLY FITTED OUT BY THE TENANT IN 2016. The Property has an EPC rating of G+. A full EPC can be provided upon request. The ground floor provides the dining IBERICA FOOD AND CULTURE LIMITED FINANCIAL INFORMATION area, the main bar and an additional PLANNING servery area which is used by the current The property is Category A Listed occupier as a delicatessen counter. The and is within the Glasgow Central 30-Sep-15 30-Sep-14 % Change kitchen and preparation areas, cellar and Conservation Area. storage space, customer toilet facilities and Turnover £8,213,037 £5,440,435 +51% all staff/ancillary accommodation are TENURE located at basement level. Tangible Net Worth £2,320,421 £2,114,271 +10% The property extends to a total Heritable (Scottish equivalent Gross Internal Area (GIA) of c. 515.86 of English Freehold). sq m (5,553 sq ft). ACCOMMODATION

ADJUSTED GIA*

Floor Area (sq ft) Ground 2,873 Basement 1,340 TOTAL 4,213 Rent p.a. £90,000 Rent per sq ft £21.36 IBERICA | 140 ST VINCENT STREET | GLASGOW

LEISURE MARKET COMPARABLE DATA

The Glasgow leisure and restaurant market LETTING has expanded considerably over the past 24-36 months with a number of high-profile new occupiers entering the market, driving exceptional rental growth in the sector. ADDRESS TENANT DATE INITIAL RENT ADJ. GIA RENT PER SQ FT There remains active demand from several 85 West George Street YO! Sushi Dec-16 £160,000 3,842 £41.64 national occupiers and the prime rent is currently £35.00-£41.64 per sq ft. Mitchells and 47 St Vincent Street Butler t/a Miller Q4 2015 £285,000 7,055 £40.40 and Carter 47/49 Sauchiehall Street Bella Italia Sep-15 £165,000 4,156 £39.70 22-24 West Nile Street Bill’s Mar-15 £175,000 - £35.00 Handmade 78 St Vincent Street Oct-14 £75,000 2,229 £33.65 Burger Co Gourmet Burger 65 St Vincent Street Jun-14 £135,000 3,484 £38.75 Kitchen 57-61 St Vincent Street Five Guys Jun-14 £175,000 4,331 £40.41

INVESTMENT

THE PRIME LEISURE YIELD FOR THE BEST LOCATED UNITS IN GLASGOW IS CURRENTLY AT 4.75%.

ADDRESS TENANT DATE PURCHASER PRICE NIY COMMENTS The Townhouse, Buchanan Street, Chaophraya Oct-15 Overseas Private £5.95m 4.75% The property was subject to a fixed up-lift rent review Glasgow Investor in March 2017, linked to growth in RPIX. 1-2 Castle Terrace, Edinburgh RBS; Jan-15 Knight Property £5.61m 5.00% The purchasers apportioned a NIY of 5% to the Wagamama Group restaurant element within the overall purchase price. The blended yield was 6.68% 57-61 St Vincent Street, Glasgow Five Guys Oct-14 F&C REIT £3.30m 5.00% The rent is subject to a fixed uplift to £220k p.a. in September 2016. 35-39 St Vincent Place, Glasgow Jul-14 ECH Properties £2.15m 5.00% Restaurant unit on ground floor of an 1873 B-listed office building. 71-73 Lothian Road, Edinburgh Nando’s May-14 Private Investor £2.36m 5.00% The sale attracted competitive bidding from institutional and private investors. IBERICA | 140 ST VINCENT STREET | GLASGOW IBERICA | 140 ST VINCENT STREET | GLASGOW INVESTMENT INVESTMENT PROPOSAL RATIONALE

VAT Opportunity to acquire a long income Glasgow Leisure Investment. The property has been elected for VAT and therefore VAT will be payable on the Central location in the heart of Glasgow’s purchase price. However, it is anticipated prime CBD which comprises c. 16 million sq that the sale will be treated as a Transfer of a ft of office space. Going Concern (TOGC). The Property has been extensively PROPOSAL refurbished internally by the tenant. Strong rental growth prospects - The passing We are instructed to seek offers in excess of rent analyses back to £21.36 per sq ft based £1,420,000 (One Million Four Hundred and on the adjusted GIA of 4,123 sq ft, showing Twenty Thousand Pounds Sterling), exclusive its reversionary nature when compared to of VAT, for our client’s heritable interest. city centre leisure units which are let off rents of £35.00 per sq ft – £41.64 per sq ft. A purchase at this level would provide a net initial yield of 6.00%, allowing for purchasers Iberica Food and Culture Limited has costs of 5.61%. demonstrated significant growth since its establishment. We understand that the business has plans for future growth with the opening of further restaurants in the short to medium term. In-light of past, ongoing and planned future growth, it is likely that the business will continue to strengthen and that its covenant will demonstrate further improvement in the short-term.

CONTACT

MONTAGU EVANS LLP Ben Farrell Elliot Cassels The Agents for themselves and for the vendors or lessors of this property whose agents they are give notice 302 ST VINCENT STREET T +44 (0)141 227 4643 T +44 (0)131 221 2449 that: (i) the particulars are set out as a general outline only for the guidance of the intended purchasers or GLASGOW G2 5RU M +44 (0)7973 315 189 M +44 (0)7968 196 212 lessees and do not constitute, nor constitute part of, an offer or contract; (ii) all descriptions, dimensions, [email protected] [email protected] reference to condition and necessary permissions 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; (iii) no person in the employment of the Agents has any authority to make or give any representations or warranty whatever in relation to this property. June 2017.