PropLens · 30 Nisbet Street, Parkhead, Glasgow G31 5ES

Offer range · Operational reposition

£245,000

£295,000

Lower end · 20% Upper end · 15%

Asking £600,000 sits 103% above the upper end of the range.

Yield on Cost at asking falls to 8.6% — Marginal band. The income produced at this price does not service debt and reward equity simultaneously.

Net Initial Yield at asking is 9.2% — Marginal for secondary Glasgow. Asking implies prime pricing not supported by the income profile.

Income basis Stabilised: vendor leaseback (Building A, £48,500) + ERV on vacant Buildings 1 + 2 (£29,461). Less landlord costs (ground rent, insurance, management, repairs).

£77,961 − £22,894 → NOI £55,067

Offer explorer

Your offer

£295,000

Equity required

£0

Lender lends £263,250 against VP £405,000

Cash-on-cash

DSCR @ 8%

2.61×

Same at any price

Net cash flow

£34,007

NOI − debt service (fixed)

Lender lens · five ratios

DSCR @ 8% rate 2.61× Strong

Stress DSCR @ 10% rate 2.09× Strong

Debt Yield (NOI / Loan) 20.9% Strong

Yield on Cost 0% Viable

Net Initial Yield 0% Viable

65% LTV · 8% IO · 7% costs · NOI £55,067 · VP £405,000 (lender basis)

Thesis

The complex comprises five units plus workshops across approximately 13,663 sqft in Parkhead, with Building A (Buildings 3-8, c. 10,197 sqft of workshop and modular space) covered by a 5-year vendor leaseback at £48,500 per annum. Buildings 1 and 2 (3,466 sqft of cellular and open-plan office, north end of the complex) sit vacant and form the lease-up component of the deal. Stabilised ERV is indicated at £77,961 pa. The vendor's covenant is short and represents the vendor's own trading business, which a lender will treat as non-conventional income — vacant-possession value is the appropriate basis for the loan calculation. Refurbishment of Buildings 1 and 2 to a lettable standard is budgeted at £173,300 (3,466 sqft × £50/sqft) and is netted from the price the operational-reposition lens can support. Ground rent of £8,200 per annum on the part of the site held under a 125-year ground lease erodes the net stabilised yield. The deal type is operational reposition: same highest-and-best-use, value released by stabilising the vacant offices on commercial licences or short leases, with the leaseback servicing debt during lease-up.

What's wrong with it

3,466 sqft of cellular and open-plan office space is vacant and requires £173,300 of refurbishment before it can be leased.
The vendor's leaseback covenant is the vendor's own operating business on a 5-year term, which lenders will treat as non-conventional.
Ground rent of £8,200 per annum reduces net income by approximately 11% of stabilised gross.

What's right with it

The leaseback on Building A provides £48,500 of contracted income from day one to service debt during the Building 1/2 lease-up.
Secured central yard with 26 car spaces, gated access, and adjacency to the new Parkhead Health and Care Hub support tenant retention and re-letting.
Eight separately rated units allow each part to qualify for Small Business Bonus Scheme relief independently, reducing occupier rates exposure.

Risks

Lease-up of Buildings 1 and 2 may extend beyond the 12-month void assumption in a thin Parkhead office market.
Refurbishment cost overruns on the £173,300 budget would compress net cash flow below the modelled 20% hurdle.
Vendor's trading business defaulting on the leaseback during the 5-year term would remove the income that funds debt service.

DD gaps

Sight of vendor's leaseback heads of terms and full draft lease, including FRI terms, break options, and rent review mechanism.
Energy Performance Certificates for all eight units (brochure states available on request).
Separate rateable value breakdown per unit and confirmation of Small Business Bonus Scheme eligibility for each part.

Considerations

Mixed tenure: heritable on the main complex and a 125-year ground lease (expiring 2120, £8,200 pa) on c. 0.40 acre to the south east.
Asking £600,000 exceeds the methodology range upper end by approximately 103%; vendor reasoning for the price has not been disclosed.
VAT election status not disclosed in the brochure (transferable as a TOGC if both parties are VAT-registered and elections align).

Property & Valuation

Facts, condition, comparables, valuation stack, and purchase-cost schedule for due-diligence reference.

Facts

Address	30 Nisbet Street, Parkhead, Glasgow G31 5ES
Asking	Offers Over £600,000 (exclusive of VAT)
NIA	13,663 sqft (eight units across the complex)
Property type	Mixed commercial complex: offices and workshops
Year built	c. 1990
Tenure	Mixed heritable + 125-year ground lease (£8,200 pa, expires 2120)
Parking	26 spaces, secure gated yard
Vendor leaseback	Building A (Buildings 3-8, c. 10,197 sqft): 5-year leaseback at £48,500 pa to vendor's operating business
Vacant	Buildings 1 + 2 (3,466 sqft): cellular and open-plan office, ground + first floor
Stabilised ERV	£77,961 pa per brochure
EPC	Available on request (not stated in brochure)
RV	Separate assessments per unit (breakdown on request)
Agent	Marc Erunlu / Emma Louise Erunlu, Lapsley McManus Property Consultants
Listing	LoopNet

Photos

Physical assessment

Building 1 (1,932 sqft, single storey): cellular offices, large open-plan office, WCs and kitchen. Self-contained entrance behind security shutter. Gas central heating, double glazing. Mid-1990s office quality.
Building 2 (1,534 sqft, two-storey, interlinked with Building 1): cellular offices ground floor, open-plan office first floor. Same construction and condition as Building 1.
Building 3 (594 sqft, two-storey): office with rear tea prep, two first-floor offices, storage and shower. Full-height 5m roller shutters front and rear providing access to the northern yard.
Building 4 (1,096 sqft, single storey): offices and training rooms with WC. Brick-clad, adjoining Building 3.
Buildings 5A-C (4,779 sqft, three workshop units): steel frame, blockwork walls, profile-sheet cladding. 5m eaves, roller-shutter access, shared yard.
Building 6 (1,100 sqft): workshop / store, same construction as 5A-C.
Building 7 (1,946 sqft): modular portacabin training facility accessed from East Wellington Street.
Building 8 (682 sqft): workshop / store.
External: facing brick on the office stock, profile sheeting on the workshops. Secured central yard with 26 spaces and gated access.
Surroundings: secondary Parkhead pitch, 2.5 miles east of Glasgow city centre. Parkhead Cross and Forge Shopping Centre / Retail Park 0.4 miles to the north west. New Parkhead Health and Care Hub directly opposite. M8 J13 and M74 J1 accessible via A728.
Condition rating: Fair (default under deterministic rules; no "refurbished" or "new build" language in brochure or listing).

Per-unit income

Unit	NIA (sqft)	Status	Rent pa	£/sqft
Building A (Buildings 3-8 + workshops)	10,197	Vendor leaseback, 5 years	£48,500	£4.76
Buildings 1 + 2	3,466	Vacant (lease-up component)	£29,461 (ERV)	£8.50
Total	13,663		£77,961	£5.71

Stabilised gross ERV £77,961 pa per brochure rent roll. Landlord costs: ground rent £8,200, insurance £3,000, management 10% (£7,796), repairs reserve 5% (£3,898). Stabilised NOI £55,067 pa.

Yield selection

Selected ARY: 11.00%

Location: Parkhead, Glasgow — secondary Glasgow peripheral commercial pitch. Yield Selection Guide indicates 10-12% for Glasgow peripheral secondary offices. Midpoint = 11.00%. The lot size adjustment (+175 bps for sub-£500k) is not applied at the £600k asking anchor; the range solve dips below £500k but methodology applies the lot adjustment to the deal anchor, not iteratively per range point.

Term yield = 10.25% (ARY less 75bps, hardcoded). Reversion yield = 11.00%.

ARY	Stabilised value (NOI £55,067)	Δ
10.50%	£524,448	+4.8%
11.00%	£500,609	selected
11.50%	£478,843	-4.3%

Valuation stack

Basis	Value	Method
Rack Rent (gross stabilised, no costs)	£710,000	ERV £77,961 / 11%
MV1 (stabilised, post-cost)	£500,000	NOI £55,067 / 11%
Term & Reversion	£430,000	Term £48,500 × YP5y@10.25% + ERV deferred 5y − refurb capex
VP (MV3) — lender basis	£405,000	ERV / ARY less 12mo void, 6mo rent-free, 10% reletting, refurb £173,300, holding £4,200
180-day restricted marketing	£450,000	MV1 × 0.90
90-day restricted marketing	£400,000	MV1 × 0.80
Asking	£600,000	Vendor target (Offers Over)

Refurb-to-let capex of £173,300 (Buildings 1 + 2, 3,466 sqft × £50/sqft Standard commercial scope) is netted into the VP and T&R calculations. Lender basis is VP — the vendor leaseback covenant is non-conventional and would not be underwritten as a conventional FRI income stream.

Acquisition benchmark

Asking £600,000 across 13,663 sqft = £43.91/sqft. The Edozo benchmark for commercial in a decent secondary area sits under £100/sqft (likely good value on a £/sqft basis); the figure here is well within that benchmark. The £/sqft test alone is not the binding constraint — the income profile and refurb requirement are.

For context, the stabilised NIY at asking is 9.2%, against a 10-12% secondary Glasgow peripheral target. The asking price is consistent with a near-prime yield on stabilised income, which is not consistent with the location or the non-conventional covenant.

Purchase costs

Schedule at range upper (£295,000):

Item	Amount
LBTT (Scotland)	£3,250
Legal fees	£4,500
Disbursements	£650
Broker fee (1%)	£2,950
Lender arrangement (2% × 65% LTV)	£3,835
Lender legal fees	£2,500
Surveys / DD	£2,000
Total	£19,685 (6.7% of price)

The methodology uses 7% as the standardised purchaser costs multiplier in the range solve. The itemised schedule above is for reference.

Refurb-to-let capex: £173,300. Buildings 1 + 2 vacant (3,466 sqft × £50/sqft Standard commercial scope). Not listed, not basement, urban Glasgow — no cost escalators applied. Tenanted units (Buildings 3-8, vendor leaseback) assumed lettable as-is.

Strategy & Appraisal

Value-add angles, holding-structure recommendation, and supporting analyses for the bid thesis.

Value-add angles

1. Operational reposition — lease up Buildings 1 + 2

Viability: Strong. Buildings 1 + 2 (3,466 sqft) are the lease-up. Refresh-to-let budget £173,300 (£50/sqft). Stabilised contribution £29,461 pa on top of the £48,500 leaseback. Risk: Parkhead office demand is thin; 12-month void is the methodology assumption and may be conservative for a fully refreshed product but cautious for an unmarketed-vacant pitch.

Max purchase contribution: Included in the headline range (£245k-295k).

2. Multi-let licence conversion on Buildings 1 + 2

Viability: Moderate. Per the multi-let reference, Parkhead is not in the rate table; Dennistoun (a comparable secondary Glasgow pitch) sits at £28-37/sqft licence (office + health). 3,466 sqft at the Office column £28/sqft × 90% stabilised × 70% effective gross less 15% running costs would lift the Buildings 1 + 2 contribution from £29,461 conventional ERV to approximately £62,000 stabilised NOI. The premium is real but requires owner-operator overhead and a longer ramp; the methodology range above uses conventional ERV as the conservative anchor.

Risk: Multi-let demand in Parkhead is unproven. The Dennistoun rate carries a town-quality discount in itself; Parkhead may sit a further 10-15% below.

3. Vendor finance on the leaseback element

Viability: Moderate. The vendor is staying as occupier on a 5-year leaseback. Vendor's appetite for deferred consideration secured against their ongoing rent obligation could improve the buyer's day-1 equity position. Worth exploring at heads of terms.

Risk: Vendor business covenant is the leaseback covenant — same credit risk on both sides of the structure.

4. Title split / individual unit sale (long-term)

Viability: Weak in the near term. The eight units are separately rated but share the central yard and gated access. Title split for individual sale would require servitudes and yard-management arrangements; the ground lease on c. 0.40 acre complicates separation. Not the lead strategy; relevant only on a multi-year exit horizon.

Holding structure

Recommendation: Company SPV. The asset is commercial multi-let with active lease-up and ongoing management. SPV gives clean ring-fencing of the leaseback covenant risk, allows refurb capex to be expensed and capital allowances claimed, and is the natural vehicle for a higher-rate taxpayer holding sub-£1m commercial.

SSAS is technically eligible (commercial use) but the leaseback structure — where the vendor's own trading business is the tenant — risks SSAS connected-party complications if the buyer has any commercial relationship with the vendor. The active management overhead on the lease-up phase also sits awkwardly within a pension wrapper.

Sources

Lapsley McManus brochure (April 2026): rent roll, floor schedule, tenure breakdown
LoopNet listing (40250721): asking price, marketing terms
Ryden 90th Scottish Property Review 2025: Glasgow secondary yield evidence
Revenue Scotland: LBTT non-residential band schedule
PropLens internal: Edozo conventional rate benchmarks; multi-let comparable rates (Dennistoun proxy)

Jurisdiction

Scotland