Virgin Money has pulled circa 100,000 square feet of Grade A offices from the Glasgow market after deciding to take back floors it had been looking to sublease, CoStar News understands.
The bank initially agreed to prelet around 138,000 square feet at 177 Bothwell Street in 2019, according to CoStar data, but decided to shed circa 100,000 square feet a few years later after it switched to flexible working during the pandemic.
Cushman & Wakefield was appointed by the bank to sublease it, with the building's developer HFD expected to take one of the floors for its flexible workspace offering.
But market sources have told CoStar News that the bank has taken back those four floors at 177 Bothwell Street following Nationwide's £2.9 billion deal to buy Virgin Money in March. The space, floors 6, 7, 8 and 9, totals 96,746 square feet and will be used by the company.
Local sources have said that HFD, which sold the property to PonteGadea for circa £185 million in 2022 in a deal revealed by CoSar News, will look elsewhere to fulfil its circa 25,000-square-foot requirement in Glasgow, or it could wait to launch the offering at a future development.
Glasgow registered a 50% take-up in office space in the first half, according to Savills, while prime rents in the city now stand at £39.50 per square foot, BNP Paribas Real Estate said in May.
As part of the reduction of its office portfolio, Virgin Money closed its operation at Glasgow's Granite House on 31 Stockwell Street.
Other tenants at 177 Bothwell Street circa 313,000-square-foot building include Transport Scotland (circa 49,000 square feet), AECOM (circa 19,000 square feet), and Datavita, a data centre operation which agree a circa 8,000-square-foot deal in 2022.
Virgin Money and Cushman & Wakefield did not provide comment.
(Amended on 5 August 2024 to reflect prime rents in Glasgow are £39.50 per square foot.)