Big property deals offer Capital hopes of recovery

TWO major property deals worth more than £100 million in total were today hailed as further signs of the green shoots of recovery in Edinburgh.

Scottish Widows Investment Partnership (SWIP), one of Scotland's biggest fund managers, is understood to be on the verge of buying Hermiston Gait retail park.

The Edinburgh-based investor, Scotland's second largest investment firm behind Aberdeen Asset Management, is ironing out the final legal points of a 60m deal to buy the park.

If the deal goes through it will be the biggest new investment in the city so far this year, and comes on the back of news that international investment firm Invesco Real Estate has purchased New Uberior House and Princes Exchange, the imposing office buildings in Tollcross, for 55m.

SWIP Property Trust manager Gerry Ferguson is convinced that the commercial property market is "close to, if not at the bottom", making it the optimum time to invest. He added: "Good buying opportunities are beginning to emerge and now is the time to reap the rewards.

"Hermiston Gait is exactly the type of asset we are actively looking at and it fits perfectly with our strategy of investing in core long-lease stock."

Hermiston Gait was opened in 1994 after being developed by New Edinburgh Limited, the joint venture between the city council and Miller, which also developed and owns Edinburgh Park.

It sold the site to London-based Clerical Medical & General Life Society, then a mutual company, for 42m shortly before the site opened. The firm demutualised soon after and was bought by Halifax, which became part of Edinburgh-based HBOS in 2001.

New Uberior House and Princes Exchange, meanwhile, sits just 200m from SWIP's headquarters in the city's exchange district. The building was financed and built by the Crown Estate in 2000.

However, the credit crunch wiped a large chunk of the value off the Queen's property portfolio in Edinburgh and it put Princes Exchange up for sale.

A spokeswoman for the Crown Estate said the sale had enabled it to "redeploy the capital opportunistically in the market" and confirmed there was a demand for commercial properties.

Colin Finlayson, investment director at Jones Lang LaSalle, said: "This is a significant transaction for Edinburgh and is one of the highest profile transactions in the UK regions this year.

"The purchase is reflective of investor appetite for prime, well-let properties."