W la porchetta d'Ariccia
Into the Valley with business park project
The ScotsmanHIGHCROSS, one of the country's leading investors in UK office and industrial markets, is about to unveil multi-million-pound plans for the development of what will be the second largest commercial and business park in Scotland.
It will be at the former IBM site at Greenock, which has been called Spango Valley – and has now been re-branded by Highcross as Valley Park.
IBM still occupies about 200,000sq ft on the 60-acre site – and Highcross's plans for the other 400,000sq ft have already brought in inquiries from potential occupiers.
Associate director Mark Evans, who heads the Newbury-based company's Scottish office in Glasgow, said: "We have kept our plans pretty well under wraps, but we are now ready to go.
"A full design team has been on board for over a year and we have been working closely with the local authority.
"The masterplan involves some demolition, redevelopment and some refurbishment to open up the space. There is a canteen and dedicated rail halt on site. We are currently in advanced stages of discussions with a number of occupiers to take space and hope to have something agreed within the coming weeks.
"Our aim is to open up the site to provide mixed-use commercial and business park facilities, which will offer a range of office and building space and industrial sites to meet the needs of existing companies in the Inverclyde area wishing to consolidate and expand and at the same time be attractive to incoming businesses."
Highcross acquired the site and three others down south from IBM in 2005 in a sale-and-lease-back deal for about £120 million. Last year, IBM declared a number of buildings within the Greenock park as surplus to requirements and exercised a number of break options in accordance with its lease.
Space in Valley Park will be available on a flexible and competitive basis, with 3,000sq ft and upwards in office and industrial space. Joint agents are Ryden and James McGee Greenock.
Highcross last year raised close to £1.5 billion, mostly from United States-based investors, with debt finance provided by the Royal Bank of Scotland and a syndicate of banks, for its third investment fund
Evans says: "We have a three-year investment period from September last year. We have a lot of work to do and we are looking for further opportunities."
From this third fund, it has paid £2 million for Wallace House, a five-storey modern office building in Stirling, which had been owned by a house-building firm that went into receivership. It has some sound tenants, including the Secretary of State for the Environment, and had a potential total annual income of about £320,000
In Edinburgh, and also from this fund, it paid Kenmore £7.76 million for two whisky bonds in Leith – the Bonnington Bond and the Sugar Bond, which have a total of 75,202sq ft. It was regarded as a key investment requirement with an opportunity to add value.
Both bonds have been refurbished, are partially occupied and are being made available at rents which reflect a market that is in the favour of tenants. Evans states: "We knew that it was going to be a tough market, which means that the deals we are offering are very competitive."
Rents for the two bonds have been around the £16 to £17 mark, but there is now a significant discount on this.
Peter Fleming, of agent Montagu Evans, said Highcross was a flexible landlord. He explained that a lot of tenants might find it difficult to get funding for fitting-out and said that providing this could be part of the deal, as well as reduced rents over an extended period.