NHS bid points to healthier future for city's former GPO

Published on Monday 2 November 2009 08:55

NHS Lothian is lining up a bid to become the second tenant in the Capital's former GPO building, which has been lying largely empty for years.

The health board wants to take a floor within Waverley Gate after agents started offering cut-price deals on the building. The board has been looking for a city-centre office since announcing a plan to turn office space at Edinburgh Royal Infirmary into new wards.

The deal would be a major boost for Waverley Gate, which has struggled to attract businesses since a 100 million revamp was completed five years ago.

Microsoft became the first firm to move in last year, although it only took 12,100 square feet of space – leaving 95 per cent of the building empty.

But since owner Castlemore plunged into administration, the office has fallen into the hands of administrator BDO Stoy Hayward, which has slashed rates in a bid to attract tenants.

It is understood that NHS Lothian would pay at least 35 per cent lower rent rates than the 31 per sq ft that Microsoft paid.

While the health board is keen to move into the building, the initiative would have to be approved by the Scottish Government, so confirmation could take several months.

One property source said: "A lot of public sector agencies need to get approval from the Scottish Government about any spending, and (John] Swinney's casting his eye over everything at the moment.

Waverley Gate is the NHS's preferred offer, but it is some way from getting the boxes ticked."

After Castlemore fell into administration, it emerged that the value of Waverley Gate fell to only 32m in January, from a high of nearly 90m, and it is expected to have declined further since then.

The city council has also expressed an interest in buying Waverley Gate – a deal that could still go through if NHS Lothian does lease some of the building.

Iain Graham, director of capital planning at NHS Lothian, said: "We are looking at a range of cost-effective and energy-efficient properties in central Edinburgh to base our headquarters. Whichever property we do choose will be subject to Scottish Government approval."