Deal Follows UK Government Pre-let Moving 2,900 Civil Servants Into the Heart of Edinburgh’s Old Town
Artisan Real Estate Investors, the partnership behind Edinburgh’s award-winning New Waverley development, has confirmed that it has completed the sale of the scheme’s 190,000 sq. ft. office component to Legal & General.
Legal & General has 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 2017 with the UK Government to create a new office hub at New Waverley, moving some 2,900 civil service jobs into the heart of Edinburgh’s Old Town.
The Grade A office development is expected to complete in June 2019 and will include HMRC, which will run one of their 13 regional centres from New Waverley, under the terms of a 25-year lease.
The new Government office hub is set to continue the momentum of New Waverley’s current development phase which will see the high quality office space blend with restaurants, cafes and shops around a new public square.
Representing Legal & General’s fourth Government hub forward funding deal, it follows the acquisition of 3 Glass Wharf, an 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 seamlessly links Waverley Station with the city’s iconic 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.
The New Waverley offices will be arranged across two linked buildings providing some 190,000 sq. ft. of space and offering the highest levels of sustainability and operational efficiency. Employees will benefit from modern, well-lit Grade A office space with added staff amenities including a landscaped roof area providing sweeping views across the Waverley Valley. Work on the office development is currently underway and is due to be completed in summer 2019.
New Waverley has won four of place-making awards in 2017 – including best regeneration project for both the Scottish Property Awards and the National Royal Institute of Chartered Surveyors (RICS) Awards.
For more information about the progress of New Waverley visit www.newwaverley.com