JSE and Luxembourg-listed MAS Real Estate has acquired two Bank of Scotland-let office buildings in Edinburgh for £71m – the largest office investment deal in the city so far this year.
MAS Holdings, a subsidiary of MAS Real Estate, has bought the entire issued share capital of New Uberior House Ltd, which owns the two adjoining buildings, Princes Exchange and New Uberior House.
European real estate fund manager Aerium represented New Uberior House on the sale. Roebuck Asset Management acted on behalf MAS Holdings.
The properties together comprise 158,423 sq ft of offices and are let to a single tenant, Bank of Scotland, over several leases, all of which expire in December 2025. Bank of Scotland is a subsidiary of the Lloyds Banking Group.
Robin Carr, co-chief investment officer at Aerium, said: “The sale of Princes Exchange and New Uberior House in Edinburgh realises our business plan to deliver an attractive cash on cash return to our investors at time of tight supply into a strengthening market.”
MAS has agreed £39m of bank lending for the acquisition from DekaBank alongside a net equity investment of £32m. The debt is for a term of five years at a margin of 1.5% over Libor.
The developer is currently delivering the 204,514 sq ft New Waverley phase II office building in Edinburgh, which is prelet to the government and is due for completion in June 2019.
Nick Rhodes, director of Roebuck Asset Management, said: “We are delighted to have completed this transaction with Aerium and are now immediately focused on driving forward rental and other value-add opportunities through proactive asset management.”
CBRE was appointed to sell the buildings earlier this year for more than £68.5m, reflecting a net initial yield of 6.03%.
Knight Frank advised the purchaser.
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