A pan-European investor has acquired a prime mixed use office and retail block at 40 Princes Street, Edinburgh, according to the purchaser's advisor, BNP Paribas Real Estate.
The office transaction, at a price of £29.525 mln (€35 mln) equates to a net initial yield of 7.5%.
Developed in 2005, the property is one of only a handful of modern developments on the historic pitch of Princes Street offering large retail space and Grade A offices, all benefitting from a prime location next to Waverley Station, St James Quarter and St Andrews Square.
The space has been home to H&M for almost 20 years and has a fully let office line up, the most recent tenant Cubo taking space earlier this year for their first Edinburgh flex offering.
Gary Cameron, head of Scotland at BNP Paribas Real Estate commented: 'At a time when the wider market is facing challenges, particularly around the office sector and finance pricing, it demonstrates that for a quality asset in a core location, investor appetite remains.
'40 Princes Street offers the best office space on the street and Princes Street continues to be the dominant retail pitch for the city, book ended by the nearby St James Quarter. New occupiers are committing to space with some significant retail, hotel and leisure redevelopments in the pipeline.
'Our client has bought a landmark Edinburgh asset with a strong income profile at a time in the cycle where pricing is offering discount to longer term average yields.'
BNP Paribas Real Estate and Pinsent Masons advised the purchaser. Lismore Real Estate Advisors and Dentons advised the vendor.
