Legal & General (L&G) has acquired the New Waverley office development scheme in Edinburgh from UK developers Artisan Real Estate for a reported £100 mln (€112 mln).
L&G secured the development on behalf of Legal & General Retirement, which targets high-quality, long-term, income generating UK assets. The deal follows a pre-let agreement announced in July 2017 with the UK government to create an office hub at New Waverley.
'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,' commented Adam Kerr, head of annuity transactions, LGIM Real Assets. '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.'
The Grade A office development is expected to complete in June 2019 and will include HMRC under the terms of a 25-year lease. It forms part of a £200 mln (€225 mln), 7.5 acre (3 ha) mixed-use scheme by Artisan, also comprising 400 hotel rooms across two Whitbread hotels and an Adagio Aparthotel.
The deal represents Legal & General’s fourth UK government hub forward funding deal, following the acquisition of 3 Glass Wharf in Bristol, the Central Square scheme in Cardiff, plus a development at India Buildings in Liverpool.
'This transaction reflects the strong income stream, covenant strength and rare prime city centre development opportunity offered by New Waverley,' said Artisan’s projects director Clive Wilding. 'The disposal facilitates the recycling of capital into further opportunities as part of Artisan’s stated investment strategy.'
