£28.5m deal for prime offices
UBS Asset Management acquires Quartermile 2
Quartermile 2: home to five tenants
UBS Asset Management has acquired Quartermile 2, one of Scotland’s prime new offices, in a £28.5 million deal.
The building, which houses five tenants including law firm Morton Fraser and the Scotch Whisky Association, was acquired by UBS’s Real Estate & Private Markets business on behalf from the Swiss-based fund, AFIAA. The deal represents a yield of 5.4%.
Constructed in 2009, the Grade A building provides 58,840 sq ft of flexible, open plan office accommodation spread over six floors.
Quartermile 2 is one of a series of office blocks on the site of the former Royal Infirmary, close to the the University of Edinburgh.
There are more than 1,000 apartments and 350,000 sq ft of office space, together with restaurants and other leisure facilities.
Designed by the architects Foster & Partners and extending to 19 acres, the development is home to more than 20 businesses currently employing 2,200 workers.
Howard Meaney, head of Real Estate UK at UBS-AM, said: “Having long been impressed by Edinburgh’s transformational Quartermile area, we’re very pleased to now gain access to it through our acquisition of this prime office asset.
“Edinburgh continues to see robust occupier demand for high quality and well-located office assets that offer tenants a bespoke working environment alongside access to a range of amenities, open spaces and excellent transport links.
“The Quartermile development goes from strength to strength as one of the city’s most desirable mixed-use schemes, having achieved a number of major pre-lets with ambitious plans in the pipeline to capture further growth.
“We look forward to enjoying some of the upside as this district continues to thrive, while our asset management team will also be working hard to let out remaining space to maximise the value of our latest investment.”
Maximillian Opitz, transaction manager for Europe at AFIAA, said: “We want to thank UBS for their professional collaboration. The great result for both parties has underlined the strength of the Scottish market.”
Stuart Agnew, senior director at GVA, the sole selling agent, added: “We are delighted to have secured this result for our client following some competitive bidding for the asset.
“It is an example of improving market sentiment in Scotland where both domestic and international investors are seeking good quality stock providing a comfortable yield discount to London, but with strong occupational dynamics.”
For this transaction, UBS-AM was advised by CMS Cameron McKenna Nabarro Olswang while AFIAA was advised by Brodies WS and GVA.