St James Centre draws interest

Published on Sunday 27 November 2005 02:08

A BIDDING war between some of Britain's biggest property companies is looming over the St James Centre in Edinburgh, which is on the market for £157m.

Property sources say British Land, Hammerson, Australian group Lend Lease and a joint venture between Delancy and Scottish group Miller are among those lining up bids for the city centre property, which has been dubbed one of the capital's ugliest buildings.

The shopping centre, along with the St James House office block, the 147-bed Thistle Hotel, three car parks and the John Lewis department store are being sold by Coal Pension Properties.

Royal Bank of Scotland, the owner of the 1970s office building which sits on top of the shopping centre, had originally earmarked it as its new HQ before choosing Gogarburn.

Sources say RBS is now mulling plans to team up with a property group to bid for the building, which is seen as ripe for redevelopment. Several private Irish investors, thought to include Ulster-based Marr, are also said to be eyeing the asset.

Jones Lang LaSalle, which is selling the building, put St James Centre on the market at the end of October and the bid deadline is Wednesday. Sources predict strong interest and that the 157m price tag will be exceeded.

Once sold, St James House is likely to be demolished and apartments, new offices, an improved hotel and more shops built in its place. One source said the redevelopment could cost a further 150m.

RBS will play a major role whatever happens because of its ownership of part of the property.

One source said: "RBS is going to have a very important part to play in the sale. It will be a strong contender [to buy it], either on its own or with a partner."

Property developers have long coveted the St James Centre because of its city centre location and unpopularity with many in the city. It is understood that RBS recently turned down offers from developers for St James House, formerly known as New St Andrew House.

RBS and Jones Lang LaSalle declined to comment.