The huge New Waverley Edinburgh office development — located between the Royal Mile and Calton Road in the Scottish capital’s Old Town — has been sold to Legal & General.
Legal & General said it secured the development on behalf of Legal & General Retirement which invests in high-quality, long-term UK assets that generate income streams that match its commitments to pensioners.
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 Edinburgh’s Old Town.
The Grade A office development is expected to be completed in June 2019 and will include HMRC, which will run one of its 13 regional centres from New Waverley, under the terms of a 25-year lease.
New Waverley — a £200 million, 7.5 acre mixed-use scheme — is being delivered by Artisan Real Estate Investors.
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.”
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.”