Glasgow poised for 2024 record property deal as vast office housing 2,000 people goes up for sale

The nine-storey property at 122 Waterloo Street has been brought to the market by its owner - a client of Knight Frank Investment Management. It is solely occupied by financial services giant Morgan Stanley and ranks as the US group’s largest European office outside of London, with “mission critical” status for its global operations and some 2,000 staff working at the site.

The building provides almost 157,000 square feet of high-grade office space while the ground floor also hosts a gym and fitness centre operated by Nuffield Health. Opened in 2018, it is touted as being among the city’s most sustainable properties. The vast complex, which will remain occupied by Morgan Stanley post-sale, has also picked up awards for features including ergonomic breakout areas, “collaboration and meditation” spaces, an in-house restaurant and on-site wellbeing facilities. Knight Frank and Cushman & Wakefield have been jointly appointed to market the office premises.

John Rae, head of office at Knight Frank Glasgow, said: “122 Waterloo Street is a prime asset located at the heart of Glasgow’s International Financial Services District, backed by a very strong covenant in Morgan Stanley - particularly given its ‘mission critical’ status. Glasgow has seen an upturn in deal activity in the first few months of 2024, so we expect to see a good level of interest, with buyer and vendor expectations moving closer together as interest rates appear likely to stay higher for longer.”

Murray Strang, managing partner for Scotland at Cushman & Wakefield, added: “In terms of building quality, tenant covenant and resultant income security, not to mention the strong opportunity for rental reversion and future potential for value uplift, this opportunity should be highly attractive for a range of international investors and parties considering investment into a leading, regional UK office market.”

Commercial property investment volumes in Scotland fell by a third last year to just under £1.5 billion amid “ongoing economic uncertainty”, according to figures released earlier this year. Despite the decline, property experts said investment volumes remained “relatively robust” in relation to the ten-year average, while certain sectors had seen solid demand during 2023.

The figures from Savills showed that commercial investment volumes in Scotland totalled just over £1.49bn in 2023, a 34 per cent decline on the previous year’s haul. While this overall fall can be attributed to ongoing economic uncertainty, the second half of the year saw a marked improvement on the first half and a significant year-on year increase of 39 per cent when compared to the same six-month period in 2022.

The figures came as Lismore Real Estate Advisors said Scotland’s commercial property investment market was showing “promising signs of improvement” with deals up to £10 million stoking demand.

Edinburgh and Glasgow office markets distorted by weak supply of 'best-in-class' options