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Asset manager signs up for Quartermile

State Street confirms capital’s biggest office letting

Paul Curran

Paul Curran with model of Quartermile development (photo by Terry Murden)


State Street has confirmed its move to Quartermile in what will be the biggest letting in Edinburgh this year.

It will take 65,628 sq ft in the new £35 million Quartermile 3 building, the final block on the former site of the Royal Infirmary.

Talks with Quartermile have been under way since at least the turn of the year (Daily Business 6 April)

The US-based financial services company had been in talks to take space in Exchange Crescent (Daily Business 16 December).

The company initially appointed Cushman & Wakefield to find 80,000 sq ft but there was nothing on that scale available.

The company will now relocate all 800 staff from its premises in Ferry Road, Crewe Toll, to the mixed-use city Quartermile site overlooking the Meadows.

Daily Business reported State Street’s move in December

 

State Street will be based in the top five floors of the 72,991 sq ft new building, leaving only the remaining 7,363 sq ft ground floor to be occupied.

The fit out of the Foster + Partners-designed office accommodation is being incorporated into the build programme meaning State Street will begin moving in early next year.

State Street is the first to sign up for the offices and has agreed a 15-year lease. The values relating to the deal are undisclosed. 

Quartermile 3 is the final office building to be constructed at the award-winning development which is an investment managed by private property investment company Moorfield Group.

Funded by M&G Real Estate, construction of the £750m development is close to completion.

Daily Business revealed (6 April) that fantasy games company FanDuel has opted not to take up space in the neighbouring £50m seven-storey Quartermile 4 office building. Instead it has let out the space to other tenants who include Cirrus Logic, the company which acquired Wolfson Microelectronics.

Totalling 128,600 sq ft, the building was fully let four months before practical completion. M&G Real Estate provided £80m of funding in 2014 for both buildings to be speculatively developed.

Paul Curran, managing director of Quartermile Developments, said: “State Street’s decision to move to Quartermile further endorses the strength of Edinburgh’s commercial property market.

“With Quartermile 3’s ground floor representing the final opportunity for businesses to locate to our development, we are talking to a number of potential occupiers and hope to be able to make further positive announcements in the near future.” 

State Street was founded in 1792, has revenues of $10.76bn (£8.62bn) and offices in 30 countries. The company is responsible for 11% of the world’s assets.

Aaron Pope, director, asset management at M&G Real Estate, said: “We recognised the investment opportunity Quartermile presented as Edinburgh’s prime residential and commercial location.

“The successful pre-letting of Quartermile 4 in its entirety before practical completion and Edinburgh’s largest deal in 2017 having now been secured at Quartermile 3 reinforce our decision to fund the buildings’ speculative development and affirms the scheme’s position as one of the most significant new office developments in Scotland.”

Quartermile Developments was advised on the deal by agents CBRE and Montagu Evans with legal advice provided by Brodies. State Street’s advisors are undisclosed.

Current commercial occupiers at Quartermile include Skyscanner, Mercer, Investec Wealth and Investment, IBM, Morton Fraser, Maclay Murray & Spens and the Scotch Whisky Association. 

Quartermile is expected to be completed in 2018. When finished, the development will provide Edinburgh with more than 1,000 apartments – of which more than 650 are already occupied and another 176 under construction – along with 370,000 sq ft of Grade A office accommodation, 65,000 sq ft of retail and leisure space and seven acres of open landscaping.

 

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