R&D site sold
Korean investor pays £100m for Leonardo factory site
The Leonardo plant employs 1,800 workers
A South Korean investor has paid £100 million to acquire the site occupied by the Leonardo Innovation Hub in Edinburgh, making it one of the year’s biggest property investment deals.
Brockton Capital agreed to an off-market sale of the 16-acre complex at Crewe Toll which is home to the aerospace, defence and security group Leonardo. It was formerly a base for Ferranti, then BAe Systems and SELEX.
The site includes more than 439,000 sq ft of office, laboratory and industrial space. The nine-figure sale reflected a net initial yield of 5.9%. The buyer’s identity was not disclosed.
Leonardo is one of Edinburgh’s biggest employers, with about 1,800 staff. It recently signed a new 15-year lease at the hub.
The deal marks the latest move into Scotland by Asia-based investors.
In 2017 Glasgow’s Hillington Industrial Park was acquired by Frasers Centrepoint, a Singaporean publicly listed real estate investment trust.
In April this year, premises in Edinburgh’s Gyle Square were purchased for £55.2m by South Korea’s Hyundai Asset Management. This was also the site of a former BAe Systems factory, raising speculation that the same company has acquired the Leonardo site.
Max Bassadone, director at Brockton, said: “Following the acquisition of Crewe Toll East & West in 2014, we have been working with Leonardo to restructure their lease, ensuring their 75-year history with the site continues.
“The successful restructure advised by JLL fulfilled our asset management plan and we are delighted to now complete the off-market sale with the site’s new owner.”
David Johnson, partner at Knight Frank Investment Management, said: “Crewe Toll offers secure income at an attractive rental level with strong future performance prospects. We continue to seek similar off-market opportunities in the UK and Europe.”
JLL, Eastdil Secured and Brodies represented Brockton Capital on the sale, while Knight Frank and CMS advised the buyer.
The Crewe Toll site has been used as a manufacturing and development facility since 1944 and was redeveloped between 2000 and 2003.
Today it produces equipment including lasers for the US Army’s Apache helicopter, the Osprey radar for Norway’s all-weather search and rescue helicopters, and the Raven radar for Sweden’s Saab Gripen Fighter aircraft.
Link Orthopaedics UK a medical device company, has expanded its presence in Edinburgh by taking almost 10,000 sq. ft. of office and industrial space at a business park in the Gyle.
In a deal brokered by Knight Frank, the company has signed a 10-year lease at 4 South Gyle Crescent Lane, held in a Joint venture between Investcorp and Citivale.
Knight Frank acted on behalf of the landlord, achieving a rental of £8.50 per sq. ft. The deal means South Gyle Crescent Lane – which consists of 39,375 sq. ft. of office, retail, and industrial space – is now fully occupied.