German fund Triuva has bought Quartermile Four in Edinburgh for £68m – a 5.25% yield.
The renamed fund management business of IVG has acquired the building from M&G Real Estate.
The deal is a vindication of M&G’s strategy to back speculative development in the city. The fund manager agreed an £80m speculative forward funding of the building – plus the neighbouring Quartermile Three – with developer Moorfield in 2014.
Since the forward-funding agreement the 128,600 sq ft Quartermile Four, which is scheduled to complete in April, has been fully let to online gaming company FanDuel and software firm Cirrus Logic. Both companies have signed 15-year leases with 10-year breaks and are paying rents of close to £30 per sq ft.
Construction of the 73,000 sq ft Quartermile Three has just commenced and is due to complete in November 2017. No leasing deals have yet been agreed.
Moorfield bought the Quartermile complex from Gladedale Group and its lender Lloyds Banking Group for £65m in 2013.
Scotland has long been a popular investment destination for German funds, historically attracted to its higher returns and dominant cities. Open-ended fund manager Deka is also close to completing its purchase of Edinburgh council’s 202,000 sq ft Atria scheme for £100m.
JLL advised M&G; Cushman & Wakefield acted for Triuva. CBRE has been appointed as leasing agent on Quartermile Three.
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