Cash ready for Glasgow office project

CALA Properties has completed a (pounds) 30 million pre-funding deal for a Glasgow city centre office development.

Central Exchange, located on the corner of Waterloo Street and Wellington Street, will now receive financing from the German property fund Internationales Immobilien-Institut (iii-Fonds).

The deal represents iii-Fonds' first speculative commitment outside London. Earlier this summer it purchased the Sauchiehall Street Shopping Centre in Glasgow for (pounds) 46m.

With property experts now saying there is a shortage of centrally- located quality office space in the city, Central Exchange could be one of the last significant developments for several years.

The appointment of the main contractors is expected later this month, and the property will comprise 96,000 square feet over basement, ground and seven upper floors. Two ground-floor retail units of 10,000 square feet will also be available in a development which should be completed by July 2004.

The development may ease the concerns, raised in last week's Scottish Property Review, about the lack of projects scheduled for completion around 2004.

"We have already had some pre-letting enquiries," said the managing director of Cala Properties Scotland, Alasdair MacConnell. "At the moment Glasgow is an exciting market which is not being driven by an increase in demand for office space, but pressures on the supply side. Over the next two years it will be interesting to see how rent prices will be driven by a perceived lack of supply."

Cala Properties has successfully completed and let two major Glasgow developments in the past two years: 151 West George Street and the SMG headquarters on Renfield Street.

"There is no doubt that the property market has benefited from the lack of stability in the equity markets," MacConnell added. "There's a huge weight of money being invested in property."

Copyright 2002 SMG Sunday Newspapers Ltd.
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