THE former General Post Office building in the centre of Edinburgh has been sold to a division of insurance giant Prudential in a deal worth £46 million.
Now an office development that is home to a variety of tenants including Amazon, Creative Scotland, Microsoft and the National Health Service Scotland, it has been acquired by Prupim, the property asset management arm of M&G Investments. The deal represents a net yield of 7.3 per cent.
The property was acquired from Highcross on behalf of the M&G Property Portfolio, managed by Fiona Rowley and Justin Upton.
Despite being developed as grade A space and its position above Waverley rail station, the building initially struggled to attract tenants. It is now more than 85 per cent occupied.
Highcross bought it for £35m in 2010 and put it back on the market last September with a price tag of £50m.
The property fund manager snapped up the scheme after Castlemore, the developer, went into administration in 2009 after investing £100m in the project.
Natalie Andrews, an associate director at Prupim, said: “This well-located, excellently redeveloped asset provides an attractive mix of long secure income and asset management opportunities and, with a day one income return of 7.3 per cent, is a welcome addition to the portfolio.”
Prupim was advised by Jones Lang LaSalle and Montagu Evans was the selling agent.
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