NAPIER University’s halls of residence in central Edinburgh has exchanged hands in a deal worth more than £13m.
An investment company linked to the Kiltane Group, a property investor based in Edinburgh, has bought the halls in Fountainbridge for £13.4m from Royal London Asset Management.
The 0.98 acre site, which can house more than 250 students, is curre
ntly rented to Napier University for £757,000 a year.
The news follows a string of high profile property deals in the area including Bank of Scotland’s £100m plans to build a global headquarters in Fountainbridge to rival Royal Bank of Scotland’s complex at Gogarburn.
Although Bank of Scotland has not yet released detailed plans for the site, around 6,000 jobs are expected to move to Fountainbridge when building is complete.
Commercial property experts say that while the market still has some distance to go before it recovers from the sharp downturn sparked by the credit crunch last year, the Napier University and Bank of Scotland deals are a sign that investors are gradually returning to the market.
According to Alasdair Humphery, a director at Jones Lang LaSalle, investors are particularly interested in areas which are due to be substantially redeveloped over the next couple of years as they offer safer returns in an otherwise uncertain climate.
Commenting on the Napier University deal, Humphery said: “Fountainbridge is an up-and-coming part of the city with the likes of Scottish Widows Investment Partnership’s Exchange Place development, Edinburgh Quay, Lochrin Square and now Springside. I am sure Kiltane would have been attracted by the longer term development potential in this area of the city.”
However, most property investors are remaining cautious after returns plunged from double digit gains into negative territory following the onset of the credit crunch.
Last week Land Securities, Britain’s largest commercial property firm, reported a pre-tax loss of £888.8m in 2007 due to the credit crunch. This compared with a £1.98bn pre-tax profit in 2006.
The full article contains 344 words and appears in Scotland On Sunday newspaper.
