Big property transaction in capital
New Waverley offices sold to Legal & General
Offices will be complete in 2019 and house a new tax centre
Artisan Real Estate Investors, the partnership behind Edinburgh’s New Waverley development, has sold the scheme’s 190,000 sq ft of offices to Legal & General.
The insurer has secured the development on behalf of Legal & General Retirement, which invests in high-quality, long-term UK assets.
The deal follows a pre-let agreement announced in July with the UK Government to create a new office hub at New Waverley, moving 2,900 civil service jobs into the heart of the Old Town.
The Grade A office development, across two linked buildings, is expected to complete in June 2019 and will include one of HMRC’s 13 regional centres under a 25-year lease.
The offices are part of a wider redevelopment of the area which will include restaurants, cafes and shops around a new public square.
It is Legal & General’s fourth Government hub forward funding deal and is likely to be followed by the purchase of a new development in Glasgow as revealed by Daily Business last month.
HMRC has also acquired a 107,000 sq ft building in Bristol city centre, 265,976 sq ft of office space at Legal & General and Rightacres’ Central Square scheme in Cardiff, as well as, most recently, 270,000 sq ft at the India Buildings in Liverpool.
Adam Kerr, head of annuity transactions, LGIM Real Assets, said: “This is a great deal for us and will have a meaningful impact on this area of Edinburgh, creating new jobs and driving economic growth.
“This Government letting will ensure that this heritage asset is redeveloped to the highest standard and will reinvigorate this part of the city centre, blending in with the surrounding landscape which has already undergone regeneration with a new public square.”
Welcoming the deal, Artisan’s projects director Clive Wilding said: “This transaction reflects the strong income stream, covenant strength and rare prime city centre development opportunity offered by New Waverley. It also shows the value we have added by the strong sense of place-making already established at New Waverley.
“The risk-free nature of the income streams from the UK Government lease and guarantee has attracted significant interest from large institutional investors. The disposal facilitates the recycling of capital into further opportunities as part of Artisan’s stated investment strategy.”
Artisan’s £200 million, 7.5 acre mixed-use scheme links Waverley Station with the Royal Mile, forming part of the Old Town’s UNESCO World Heritage site.
During the last two years, New Waverley has delivered 400 hotel rooms, including two Whitbread hotels – a Premier Inn and a Hub by Premier Inn – and an Adagio Aparthotel overlooking the Royal Mile.