Abu Dhabi Investment Authority has sold Saltire Court in Edinburgh for £71m – a 6.5% yield.
The 180,000 sq ft office building is being bought by private Middle Eastern investor Al Rashed, which marks the group’s first investment in the UK outside London.
This sale also marks the first time the iconic Edinburgh property, which sits underneath Edinburgh Castle, has traded for more than 23 years – ADIA bought the office block in 1993 from Scottish Metropolitan.
Al Rashed’s acquisition is the latest of a string of international investors buying in Scotland.
The Edinburgh and Glasgow investment markets have recently been buoyed by international money with the SNP’s political stronghold having weakened after the General Election in May and the prospect of an imminent second referendum on independence having dissipated.
Most notably, Zara owner Amancio Ortega recently placed the Apple store in Glasgow under offer for £48m – £7m above the asking price.
Saltire Court has also sold above asking price. It was marketed with a guide of £69m when it was first put up for sale in September last year.
However, due to the uncertainty surrounding the potential of a second Scottish referendum, ADIA decided to pull the sale and wait for a more stable environment to relaunch the marketing process.
The building, at 20 Castle Terrace, is the Edinburgh base of blue-chip tenants including Deloitte, KPMG and CMS Cameron McKenna.
The average unexpired lease term is just under 10 years.
Slightly less than 30,000 sq ft is currently vacant in the building, although the seller is providing rental guarantees on the space to any purchaser and there is understood to be occupational interest in the remaining space.
Cushman & Wakefield is advising ADIA. Al Rashed was unrepresented.
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