CBRE to target foreign investors for Edinburgh's Quartermile project

LLOYDS Banking Group-controlled property developer Gladedale has drafted in a London-based agency to review "funding options" for a key regeneration project in Edinburgh.

CB Richard Ellis (CBRE) will be tasked with finding international investors from the Middle East and North America to take on residential and commercial property opportunities at the Quartermile site as part of its review.

The CBRE team, headed by Adam Hetherington, specialises in bringing a "pan-European perspective" to "underperforming" property assets.

Hetherington, CBRE's head of development, said the firm will "review the options for the delivery of the remainder of the scheme".

He said: "We will bring our robust combination of local, national and international market knowledge and expertise to examine how to take the development forward."

Paul Curran, managing director of Gladedale Capital, said the appointment of CBRE would speed up the development of the site, which the agency expects will have an end value of 500 million once complete.

The former Royal Infirmary site, a long-term development project, has been hit by significant delays since the recession.

Following a debt for equity swap with its lenders Lloyds in 2009, Gladedale Group, which also includes housebuilder Bett Homes, owed the bank around 900m.

But progress is being made. In March Gladedale announced that a 107-room aparthotel on the development would be managed by global hotel chain Marriott, while last year the firm sold its Quartermile II office building to a Swiss pension fund for 23m.

Currently Gladedale is developing a block of 31 flats for Hillcrest Housing Association, due to complete in 2012.

The developer said work has started on the next phase of 122 new-build apartments. The main former Royal Infirmary building also has planning consent to be developed as flats while there are consents for two further office buildings.

Curran said it was unlikely the review would see any major changes to the site masterplan, although it could be subject to "refinement".

"There is still a lot to do and that is part of the reason we feel if we do things a bit quicker we will be in a better place and improve values," said Curran.

"If there were joint venture partners coming in they would be looking at the residential aspects and the hotel aspects."

Jasper Masters, head of residential land agency for CBRE, said: "Once fully developed we expect to see this superb example of mixed-used development achieve an end value of in excess of 500m.