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Office deals called off as Brexit vote softens market

King's stables road new image 2
Argyle House, at rear of picture

A number of major commercial property deals in Scotland have collapsed or been put in doubt following the Brexit decision.

Confidence in the market amid volatile valuations has been blamed for investors pulling out.

A £40 million deal involving Argyle House in Edinburgh has fallen through.

Daily Business revealed in early June that infrastructure fund Equitix was acquiring the 220,000 sq ft offices facing the castle. It is currently home to the Codebase technology incubator and Edinburgh University’s IT division.

Opened in 1967 it is owned by Kennedy Wilson and managed by Telereal Trillium. It is attractive for the lucrative income stream on the 17 years left on the lease.

But the deal with Equitix, which represented a yield of just below 5%, has been called off.

Elsewhere in Edinburgh, TH Real Estate, which is developing the St James Shopping Centre, is understood to be negotiating a lower price for nearby WaverleyGate, the former General Post Office, now owned by M&G.

There is believed to be a “Brexit clause” in the deal to acquire the 217,000 sq ft building opposite the Balmoral.

Daily Business recently revealed that demolition work on the St James Centre has been delayed until the autumn.

The £70m sale of Princes Exchange and the neighbouring 158,000 sq ft New Uberior House on Earl Grey Street to private Korean investor Hyundai Fire & Marine Insurance is also said to be “in the balance”.

In Aberdeen, the developer behind City Park1 is expected to hold on to the office development despite appointing GVA James Barr to sell the building which includes the HQ of oil and gas company Wood Group.

HFD Group is thought to have put an £83m price tag on it.

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