Two well-known Edinburgh office buildings have changed hands in separate deals for a combined nearly £40 million, as investor interest in core-plus assets in the city picks up.
7 Castle Street – located on the corner of Princes Street and Castle Street – and Caledonian Exchange in Edinburgh’s Exchange district have been acquired by FSX Holdings and Catella APAM, respectively.
Knight Frank, the independent commercial property consultancy, acted on behalf of the vendors on both deals, with purchasing advice provided by GLJ Property on 7 Castle Street and EYCO on Caledonian Exchange.
Arranged over six storeys, 7 Castle Street provides 40,249 sq. ft. of retail and office accommodation on a prominent corner site between Princes Street and Castle Street. Vodafone, CBRE, and SSE are among its current occupiers.
Situated on Canning Street, Caledonian Exchange consists of 59,710 sq. ft. of Grade A office space. Its occupiers include Lindsays LLP and youth information platform Young Scot.
Knight Frank said the two transactions take core-plus offices deals in Edinburgh to £100 million over the last 12 months, following the sales of Orchard Brae House, Edinburgh Quay 1, and Exchange Tower.
Alasdair Steele, head of Scotland commercial at Knight Frank, said: “The deals for 7 Castle Street and Caledonian Exchange show that investor demand for offices in Edinburgh remains strong, despite a challenging macro-economic and lending backdrop. 7 Castle Street is a unique asset, facing onto one of the most popular tourist attractions in Europe, while Caledonian Exchange is among the Exchange’s best-known buildings.
“Combined with other recent deals, around £100 million of core-plus offices have been sold in Edinburgh during the last year. At a time when the ‘flight to quality’ has been a major trend across the UK, the deals demonstrate the resilience and the depth of investor interest in the city, with prime stock relatively limited and the occupier market remaining strong.”