Timely partition plan comes together
For an office building to successfully let, sometimes it is not just a question of having the right design at the right location, but it is also about getting the timing right.
London-based asset management firm Squarestone Growth has announced the full letting of 133 Finnieston Street, Glasgow, an 80,000sq ft Grade-a office building.
When the ten-storey asset was acquired in 2015 for £6.4 million, four floors had not been occupied since it was built in 2008.
Paul Coulter, founding partner of Squarestone, maintains that this vacancy was largely down to unfortunate timing: “The building was constructed by a development company just as the crash happened. They pre-let the top floors to a company which never took occupation.
“It was the right property, in the right location but at the wrong time. In the immediate area, the BBC hadn’t moved down, the squinty bridge wasn’t in place and the SEC was nowhere near as developed.
Coulter continues: “The whole area has completely changed in the last few years and Finnieston is no longer the poor end of Argyll Street.”
In 2015, 133 Finnieston Street was in administration and Squarestone’s purchase price was at a fraction of the build costs. The firm’s comprehensive asset management strategy has since increased the value by 70 per cent.
Coulter comments: “We knew that the property had huge value-add opportunities. Constructed over ten floors around a central core, with windows on all four elevations, the building offered outstanding cityscape views and occupier flexibility.
“Our strategy to reposition focused on creating a more flexible approach to workspace and lease structure – both of which appealed to the demand in the local market.”
Analysis of the market found that three-quarters of the demand in Glasgow was for spaces measuring under 5,000sq ft, with more than half of the market below 2,500sq ft.
Coulter says: “We looked at the building and decided to speculatively carve up some of the space.
“For some years now, traditional townhouses in the West End, which had been used for small offices, have been converted to residential homes so there is a market in the city fringe.
“Companies that were in these townhouses are unlikely to move into the city centre and pay £20-plus per square foot. So we decided that there was demand, there just wasn’t a product, which is why we divided up the space.”
Some of the division was done tentatively to test the market, but Squarestone also offered to tailor spaces to individual client’s needs and the strategy has paid off.
Existing tenants were consulted and became part of the process of upgrading the building’s amenities, such as the parking areas and lifts. A complete refurbishment of the reception area was also carried out.
The building is now fully occupied with ten tenants including Spencer Group, Handelsbanken, Clintec, Serial Affinity and Alpha Marketing.
Coulter says: “It is a vastly different area to what it was ten years ago, and with bars and restaurants and excellent transport links, the repositioned building has worked well.”