Property deal in capital
Edinburgh council sells Atria to German investor
Savills, CBRE and HBJ Gateley have advised Frankfurt-based Deka Immobilien on the purchase which will boost the council’s stretched budget.
The two buildings at Atria total 200,000 sq ft of office and retail space, and tenants include PwC, Brewin Dolphin, Aon, IBM, the UK Green Investment Bank, the Law Society of Scotland, Alliance Trust and Lothian Pension Fund. A Co-op food store and Café Klaris occupy retail units.
Proceeds from the sale will be used to repay the loan on the development and bolster the council’s Strategic Development Fund which was set up in 2013 to help create new development opportunities.
The council said it will also support “business innovation, deliver jobs and promote economic growth in Edinburgh, and help deliver the council’s transformation programme.”
John Heaver, director of Savills, said: “With a 100% prime location in the Exchange District, in the heart of the capital, Atria Edinburgh is arguably the best office building in the city that satisfies Deka’s investment requirement for modern, high quality prime offices in leading UK cities.
“Whilst the majority of space is well let, the leasing fundamentals in Edinburgh, where demand for prime office space increased by 44% in 2015, are encouraging for the vacant accommodation. Moreover Deka was attracted to the comparable good value as Scotland’s investment market continues to trade at a discount to the rest of the UK.”
According to Savills research, Scotland’s investment market continues to attract increasing levels of international interest with overseas investors growing to take a 41% share of total investment in Scottish commercial property in 2015.
Councillor Gavin Barrie, convener of the council’s economy committee, said: “This is a further endorsement of the council’s decision to create an innovative funding package to develop much needed Grade A office space in the city to attract new, and retain existing, businesses in the capital while also cross-subsidising the cost of an expansion to the Edinburgh International Conference Centre (EICC).
“The fact that we have been able to attract investment into Edinburgh from a major overseas real estate company is testament to the quality of the building and its occupiers.
“Our plan was always to sell Atria once the development was completed and the economic conditions were right to achieve the best possible return for the council’s investment and I believe we have achieved this.”
Montagu Evans, JLL and Shepherd & Wedderburn acted for Edinburgh Council.