Lightening up

The mood has lightened in Edinburgh as the office market experiences a stronger performance. As a result there is a growing appetite for new developments, as shown by Gladedale seeking a funding partner for the next stage of its £450 million Quartermile project at the 19acres of the former Edinburgh Royal Infirmary site.

When completed, it will have 900 homes, two hotels, retailing, leisure, 7 acres of landscaped gardens and 35,515 sq.metres (350,000 sq.ft.) of offices. Another major site has come onto the market with Lloyds Bank putting the 13 acres of the former Scottish & Newcastle Brewery next to Edinburgh’s Exchange District on the market. It has planning permission for a mixed use scheme of residential, leisure, student accommodation and retailing.

Jasper Masters of CBRE, who is reviewing funding options, said: “A lot of investors will want a trophy site within the UK.” The difficulty of finding suitable investments in London means “it makes sense to look further to places that are still internationally recognised and doing well, such as Edinburgh.” Stewart Taylor, also of CBRE, said of the Edinburgh office market that “despite the largely unchanged levels of new build stock, the indicators are encouraging following a good first quarter in terms of take up and an increasingly tangible schedule of demand.”

“The availability of mid market large floor plates, good quality accommodation on flexible terms has proved attractive to occupiers such as Amazon.”

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Salmon Flys

A joint venture between Salmon Harvester & Frogmore Developments is planning a major new HQ building and hotel on a prime 10 acre site next to Edinburgh Airport. The

JV behind the £300m proposal has claimed it could generate £4.4bn for the Scottish economy and create 3,600 jobs within 20 years. Salmon Harvester is also planning a mixed use scheme with NF Mutual at 50 Argyle Street in conjunction with the adjoining Punch Taverns. The scheme will have a new retail unit and a pub to replace the Cairns Public House together with a hotel on the upper parts. The end investment value is estimated at £12m.

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Canadians to the rescue

A Canadian company has stepped in to develop the £300 million Caltongate scheme and provide a boost to the market in Scotland’s capital city.

Prism Developments is discussing taking it over from Deloitte, the Administrator, and the Bank of Scotland. The site is located in the Old Town and was the subject of a mixed use scheme by Mountgrange.

The plan was for offices of 17,187 sq.metres (185,000 sq.ft.), 200 flats and a Sofitel Hotel which encountered considerable local opposition. Prism is not the first developer interested in the scheme because Deloitte has talked to a number of companies including Allied London and British Land.

One major scheme which is going ahead in the Old Town is the £45 million development on the Royal Mile of a hotel and mixed use project in the Castlehill area by the Chris Stewart Group.The hotel will be operated by Motel One which has 32 hotels in Germany and one in Austria and will be housed in the former buildings of Edinburgh City Council Development Department on Market Street.

In addition there will be residential space including self catering apartments, six offices totalling 5,574 sq.metres (60,000 sq.ft.) and two restaurants. The site stretches from Market Street towards Advocates Close and will take three years to complete. Chris Stewart said: “Although this site was challenging for us due to its sensitive nature and historic context, we were sure it could provide Motel One with everything they were looking for. I hope that Market Street is the first of many projects which we do with Motel One.”

As far as the office market is concerned, the first quarter saw a fall from the level of September- December 2010. Even so, it was a healthy 13,935 sq.metres

(150,000 sq.ft.) in 39 deals.