Moorfield, the UK real estate private equity fund manager, on behalf of Moorfield Real Estate Fund III (MREFIII), has sold Atlantic Quay 2 for £22.25 million to Corum XL, the French real estate investment company.
Atlantic Quay 2 is an office building at the centre of Glasgow’s International Financial Services District and comprises 77,273 sq ft of prime office space and 28 underground car parking spaces and is fully let to Lloyds Banking Group.
MREFIII acquired Atlantic Quay 1, 2 and 3, which in total encompassed 280,000 sq ft of office space, in September 2015 for c.£60 million, reflecting an initial yield of 8.5 per cent. Atlantic Quay 1 and 3 were refurbished to a ‘Grade A’ specification with new occupiers including long-term leases with the Scottish Courts and Tribunals Service and the Department of Works and Pensions. Moorfield partnered with Resonance Capital to manage and refurbish the buildings, delivering excellence-in-design and an attractive customer service offering.
Atlantic Quay 3 was sold to LGIM Real Assets (Legal & General) in January 2018 and Atlantic Quay 1 was sold to the Bank of London and the Middle East in October 2018.
Commenting on the disposal on behalf of MREFIII, Charles Ferguson-Davie, Chief Investment Officer, Moorfield, said: “We identified the Atlantic Quay buildings as prime offices at the heart of Glasgow’s International Financial Services District, in a prime riverside location and in an office-market starved of new space. They were ready for refurbishment and we are proud to have developed such a successful scheme with Resonance Capital. With the sale of Atlantic Quay 2 we have now disposed of all three buildings for c.£130 million, well ahead of the expected business plan timeframe and delivering above target returns for the investors in MREFIII.
“We have been actively selling assets from MREFIII and have sold c.£450m of properties in the last 18 months which has delivered strong returns for our investors.
“We are presently looking for new opportunities for our most recent fund, Moorfield Real Estate Fund IV. We will continue to invest in the ‘traditional’ office, retail and industrial sectors, where there are opportunities for an improvement in the location due to infrastructure investment and where we can bring to bear our experience and abilities to reposition and improve an asset.
“We will also remain focused on the ‘alternative’ sectors, especially Build to Rent, Student Accommodation and Senior Living, where we have been early investors and have accumulated a great deal of experience and knowledge. We believe that demographics and supply/demand imbalances mean that these new, emerging sectors, can offer a defensive risk profile as well as attractive growth prospects.”
The entire Atlantic Quay area comprises a unique office complex that fronts the River Clyde. It is just a short walk from Glasgow’s main shopping, leisure and entertainment districts and accessible to all major road, rail, air and bus links.
MREFIII was represented by JLL and Corum XL by Danesborough Properties.