The Saudi Arabian investment company which announced the £60 million ($74.7 million) purchase of the Sauchiehall building in Glasgow city centre in Scotland on Monday as its first major international purchase is keen on doing other deals in the United Kingdom and the United States,  one of the firm’s senior management told Zawya.

Ahmed Bucheeri, an investments principal at the 10 year-old firm, which has historically focused on investments in the kingdom, says that a change of management and of business model at the firm last year has led to it taking more of an international approach to its investment.

The firm, which has around 900 million Saudi riyals ($240 million) following the Sauchiehall building purchase, had traditionally focussed on asset management through investments in the kingdom's stock market, and investments in development properties in the country (mainly in Eastern province cities close to its Dammam headquarters).

However, it has since launched a GCC liquidity fund investing in sukuk and short-term financing and it provided mezzanine funding to facilitate a deal in London earlier this year.

The Sauchiehall building is its first non-Saudi real estate purchase, but Bucheeri said it is currently planning others.

"In international markets, we are currently focussing on the U.K. and we are open to opportunities in the U.S.

"We are also open to other sectors in the GCC - we might be open to the educational sector through private equity... but we are in the process of these things. We have not finalised anything," he told Zawya during a telephone interview on Monday.

The Sauchiehall building is a well-known shopping centre in Glasgow city centre. It has 309,000 sq ft of space spread across a lower ground, ground and six upper floors, with a 377-space car park above. Tenants include retailers Primark, TK Maxx, Sports Direct, Superdrug and WH Smith as well as gyms operator PureGym.

Arbah Capital has bought the centre from Quadrant Estates and private equity firm KKR. Arbah Capital's deal has involved funding from strategic partners, clients and external investor funds, Bucheeri confirmed, as well as a £33 million bank loan. KKR has also retained a minor interest through a financing agreement for the centre’s car park.

Bucheeri said that the centre has been bought as a core investment as opposed to a development play, although he added that construction and development work in neighbouring buildings could provide an uplift in the Sauchiehall building's value once completed.

In the press release announcing the purchase, Mahmood Al Kooheji, CEO of Arbah Capital, said: "The Sauchiehall building is located in the street with the highest footfall in the Glasgow city centre, and with selective tenants who target the value market, we expect these to be the most resilient in a downturn. These are the hallmarks of a core asset purchase," he said.

Al Kooheji also pointed to a £115 million programme of investment into the city's main retail district by Glasgow City Council.

A Q4 2018 report on Scotland's property market found that although retail property witnessed a decline during the quarter, Scottish retail property outperformed the rest of the UK. Total returns for retail property declined by 0.4 percent in Q4 in Scotland, compared to a 2.75 percent fall for the UK as a whole.

A Knight Frank report on the UK high street said that although the rents landlords could charge have been kept in check by the imposition of higher business rates (a form of tax), it expected there to be "good buying opportunities in top regional cities" in 2019, citing Glasgow, Liverpool and Manchester as examples.

(Reporting by Michael Fahy; Editing by  Mily Chakrabarty)

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