French investment firm Iroko Zen has paid around £50 million to acquire Morgan Stanley’s office building in Glasgow in what is understood to be the largest office transaction in Scotland so far this year.

The 122 Waterloo Street building, sold by Knight Frank Investment Management on behalf of an overseas client, comprises 157,000 sq ft of office space let to Morgan Stanley until 2033.

Iroko Zen was represented by BNP Paribas Real Estate.

Gary Cameron, head of Scotland at BNP Paribas Real Estate, said: “This milestone transaction is significant for Glasgow’s office sector and serves as a reflection of the broader trends shaping the market including its strong rental growth prospects, top sustainability credentials and strategic location, all of which are becoming almost mandatory for certain investor groups.

“Since the start of the year, the Glasgow office market has been experiencing an improved flow of activity.

“The city continues to be a key destination for both domestic and international occupiers, thanks to its skilled workforce, and competitive operating costs compared to other major UK and European cities.

“There has been a steady demand for core high-quality space, driven by finance, technology, and professional services.”

Hugh White, head of national capital markets at BNP Paribas Real Estate, said: “The investor interest from French SCPI funds is an encouraging endorsement of the long-term attractive fundamentals of the UK office market.

“This investor base is leading the way in the institutional market and, in turn, we expect to see momentum from other core investors build over the next 12 months.”