H&M next through the Gate?

Published on Monday 8 March 2010 18:07

A 15-YEAR letting to NHS on part of Waverley Gate, perhaps Edinburgh's most controversial large office building, has been confirmed. As anticipated, the NHS will take the second floor and part of the fifth floor, equating to 37,000sq ft in total.

Now, speculation is moving on to whether the next tranche of space will be taken by a well-known high street name. Rumours are growing within the capital's agency community that the Swedish-based retailer H&M (Hennes & Mauritz) may be in negotiations on a lease of circa 15,000 to 20,000sq ft of accommodation within the building for use as a customer-service call centre.

Perhaps understandably, the joint letting agents on Waverley Gate – CB Richard Ellis and Montagu Evans – are remaining tight-lipped about any potential deal, although representatives for both firms did not deny that discussions with H&M had taken place.

What one of them did reveal, however, was that Balfour Beatty had not taken a lease on 5,000sq ft of accommodation as reported in the property press last weekend. With an involvement in the redevelopment of Waverley Station, Balfour Beatty was in negotiations about taking space at Waverley Gate but a deal had not yet been done, said Mike Irvine of Montagu Evans.

Perhaps the most interesting issue relating to H&M is not the potential size of accommodation if a deal goes ahead, but the rental rate to be agreed. Whatever rental the NHS will pay – the agents will not confirm a figure but there is speculation that it's around 17 a sq ft – the sum is substantially lower than the 31 a sq ft secured from Microsoft, which became the first tenant of Waverley Gate when it signed up for 19,000sq ft of space almost exactly two years ago.

This is the latest milestone in the chequered history of Waverley Gate whose developer, Castlemore, went into administration a year ago. Shortly afterwards, Edinburgh City Council examined the possibility of purchasing the building for its own use but this idea appears not to have been taken further. Since administration, the 217,000sq ft development has been in the hands of BDO Stoy Hayward.

Meanwhile, the agents seem to be repositioning Waverley Gate – which is effectively a new-build structure behind an original listed faade (the former Edinburgh GPO) – in terms of marketing. Less is being made of the original "grade A" quality of the space and more on the size of the floor plates (up to nearly 40,000sq ft in one case), the aim no doubt being to spread the occupier net much wider than the crme de la crme, on which the scheme was originally targeted.

"That NHS has taken 37,000sq ft on a 15-year lease is a big, big story in the current market," said Mike Irvine, no doubt reflecting some relief that the letting has increased the occupancy rate to more than one-quarter of total space.

Ellipsis Stores' future looks Bright

BRIGHTHOUSE has opened two new stores in Fife – one in Kirkcaldy and the other in Dunfermline. In Kirkcaldy it has taken a 3,200sq ft unit in the Mercat Centre on a ten-year lease at an initial rental of 70,000 a year. In Dunfermline, BrightHouse has moved into the Kingsgate Centre, also on a ten-year lease, with an initial 15 months rent free for the 3,210sq ft unit. This latest letting follows recent deals with Dorothy Perkins, Burton and River Island. Cushman & Wakefield and BNP Paribas jointly represented City Site Estates, landlord of the Mercat Centre, while C&W also represented Crossland Properties, landlord of the Kingsgate Centre, this time jointly with Eric Young & Co and BC Commercial. Smith Price represented BrightHouse in both transactions.

A CONSORTIUM of traders, known as Riggs 89-99, has let 2,887sq ft of office space at Candelriggs in Glasgow's Merchant City. Books has signed a ten-year lease, with a five-year break option, at an initial annual rental of 28,000 (equating to 9.70 per sq ft). Ellipsis, a provider of typesetting and associated services to the publishing industry, has relocated its operation from a smaller serviced office at St Vincent Place. King Sturge advised the landlord, while Ellipsis was self-represented.

ONE of the best-known country pubs in the Lothians, the Bridge Inn at Ratho, near Edinburgh, has been sold by the Dunedin Pub Company to locally-based first-time buyers, Graham and Rachel Bucknall. The selling price was undisclosed but selling agent Christie & Co said it was off an asking price of 975,000.

RETAIL premises on Dunkeld High Street were sold for 60,000 "within a couple of days of bringing it to the market", said selling agent, Shepherd. The 234sq ft ground floor premises, at 2 High Street, had previously been traded as Macleod Gallery.

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Chartis heeds Clarion call

CHARTIS UK (formerly AIG) has become the first tenant to take space at the new office development, Clarion, at 29 Wellington Street, Glasgow, (pictured) within only two months of the building's practical completion.

The global insurance and financial player is taking 8,209sq ft on the fourth floor on a ten-year lease at 210,725 per annum.

Ryden represented the landlord, IVG, which is based in Germany. The tenant was advised by GVA Grimley, whose Alison Taylor said that Chartis was partly drawn to Clarion by its "green" credentials – the development boasts an "excellent" BREEAM rating and a B-rated energy performance certificate. The building comprises a total of 76,650sq ft of grade A space over ten floors, ranging from 4,716 to 8,214sq ft in size.