The Tun Building, Edinburgh, Sold

Whiteburn has sold The Tun building in Edinburgh's Holyrood area.

The award-winning building near the new Scottish Parliament has been purchased by Cordea Savills fund managers, on behalf of The Charities Property Fund, in a deal worth in the order of £15m.

The Tun, which was designed by Edinburgh architect Allan Murray, was judged the best commercial workplace in the UK by the British Council for Offices in 2003.  Current occupants in The Tun include BBC Scotland, Scottish Enterprise, the European Parliament, The Tun Bar & Kitchen, the Commission for Racial Equality, the British Council Scotland and the General Medical Council.

The deal for the 43,410 sq ft building represents an initial yield of 5.4 per cent on standard purchasing costs and 5.7 per cent to the purchaser as they are tax exempt.

Edinburgh-based property development company Whiteburn completed The Tun in 2001, retaining the shell of the former William Younger Brewery building, but adding a modern façade.

John Shepherd, chief executive of Whiteburn, said: "This deal reflects the underlying confidence not only in the prospering Holyrood area, but in the Edinburgh investment market."

He added: "This was a challenging redevelopment undertaken by Whiteburn as we purchased the site prior to the announcement that the new Scottish Parliament was to be located in Holyrood. The redevelopment of Holyrood has been one of Edinburgh's success stories."

John Kehoe, spokesperson for Cordea Savills, said: "This property provided an opportunity for the fund to purchase good length income from undoubted covenants in an area showing signs of strong rental growth. The property also appealed to the fund on first principles, holding a number of architectural and environmental awards."

Gavin Willins, director of Capital Markets at CB Richard Ellis, said: “It’s great news that we have now concluded this sale for Whiteburn, which has sold the development to benefit from the strength of the Edinburgh investment market and reinvest the proceeds in new projects. Cordea Savills was attracted by the quality of the accommodation within this landmark property and the strong tenant covenants.

“Yields have moved out slightly in the last quarter, however, the limited supply of offices in Edinburgh and signs of rental growth coming through would suggest that Edinburgh is well placed to attract continued investor interest for the right product.”

CB Richard Ellis represented Whiteburn while Davidson Chalmers provided their legal expertise. Tods Murray solicitors represented Cordea Savills.

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