Edinburgh office building set for major expansion after bumper £22m purchase
The former Scottish Widows Investment Partnership headquarters in Edinburgh have changed hands in a bumper £22 million-plus deal.
Edinburgh One at 60 Morrison Street in the capital’s Exchange District has been purchased by Edinburgh-based Odysseus Capital Management, which plans a major extension and redesign for the building.
A planning application has been submitted by the firm through Edinburgh-based architectural outfit CDA to increase the floorspace to some 85,000 square feet, with a proposed delivery date around mid-2023.
The new development would include two additional floors providing panoramic city views and an extensive roof terrace. In addition, the building’s facade would be overhauled to change the profile of Edinburgh One while the lower floors will provide “extensive” staff facilities.
Developers said the building would exceed the requirements of current and planned legislation around the sustainable agenda for office buildings. It would also help address a forecast critical shortage of Grade A office accommodation in Edinburgh city centre.
While the office market was subdued last year during the height of the pandemic, there has been a sharp rise in activity in 2021 as businesses prepare to return to the office, on a full or part-time basis, with changing demands.
Dobson Scotland and JLL have been appointed by Odysseus Capital Management as joint letting agents for the proposed redevelopment.
Keith Dobson of Dobson Scotland, who advised the purchaser, said: “Edinburgh One is one of the highest profile office buildings in a prestigious location.
“Odysseus CM intend to completely overhaul the building to address occupiers ESG [environmental, social and governance] requirements and deliver a building which will be capable of operating without any use of fossil fuel and no carbon emissions.
“The building will be fully futureproofed and capable of accommodating professional, financial and tech companies.”
Cameron Stott, lead director in JLL’s Edinburgh office, added: “Whilst many businesses believe they may require less space post pandemic, these same businesses have a preference for high quality space which will help them attract staff back into the office.”
A surge in commercial property investment volumes in the first half of 2021 has been described as “hugely encouraging”, in a further sign of recovery in the market.
Total investment into Scottish commercial property during the six-month period reached more than £770m, marking a 62 per cent increase on the same period in 2020.
The latest figures from property advisor Savills – released at the end of last month – mirrored the findings of snapshots from rivals Colliers and Lismore Real Estate Advisors.
Savills predicted that with a further £490m of assets currently under offer, the year-end investment figure for Scotland was on track to meet or even surpass the pre-Covid levels of £2.62 billion recorded in 2018.
The firm noted that the office sector accounted for nearly 40 per cent of total investment volumes in Scotland at £295m, with Edinburgh accounting for 36 per cent and Glasgow 27 per cent of that.
Meanwhile, the Glasgow and Edinburgh city centre office markets have seen the highest take-up figures in more than a year-and-a-half, according to property advisor Avison Young.
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