Waverleygate sold in £46m deal to Pru arm

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.

TERRY MURDE