£15m deal for city block
Arts centre and registrar offices sold for housing
Sale of St Margaret House will see a change of use
An independent arts centre and offices of the Registrars of Scotland are poised to be converted to flats or student accommodation.
Caledonian Trust, the Edinburgh-based property investment holding and development company, is selling St Margaret’s House in the city’s London Road, its largest property in the city.
Drum Property Goup has agreed a £15 million deal for the property close to Meadowbank Stadium.
The multi-storey building is currently fully let out with the main tenants being the Registrars of Scotland and Edinburgh Palette, a registered charity which provides affordable studio, exhibition and event spaces.
Edinburgh Palette offers a range of facilities for dance, theatre and other creative arts. Its future following change of use of the building was not known.
Planning permission in principle is in place for mixed-use development of residential and/or student accommodation, a hotel, offices and other commercial space, together with parking for 225 cars.
The price achieved is significantly above the book value of £5m. For the year ended 30 June 2017 St Margaret’s generated gross rental income of £158,717 and an operating profit of £138,919. The company also incurred a valuation gain of £500,000.
Gaining detailed planning permission is expected within 18 months.
Caledonian Trust intends to use the proceeds to accelerate its existing property development programme, re-invest into new property developments, repay certain existing debt and provide general working capital.
Douglas Lowe, chairman and CEO of Caledonian Trust, said: “The development is in a prime location in Edinburgh for student accommodation and affordable housing.
“Having owned St Margaret’s since 1988 we are pleased that Drum Property, with their expertise and resources, will become the new owners of the St Margaret’s site once the proposed disposal has completed.”