Press releases

New Waverley development in Edinburgh sold to Legal & General

Legal & General has secured the development on behalf of Legal & General Retirement, which invests in high-quality, long-term UK assets that generate income streams that match its commitments to pensioners.

17 Oct 2017


The deal follows a pre-let agreement announced in July 2017 with the UK Government to create a new office hub at New Waverley, moving some 2,900 civil service jobs into the heart of Edinburgh’s Old Town.

The Grade A office development is expected to complete in June 2019 and will include HMRC, which will run one of their 13 regional centres from New Waverley, under the terms of a 25-year lease.

The new Government office hub is set to continue the momentum of New Waverley’s current development phase which will see the high quality office space blend with restaurants, cafes and shops around a new public square. 

Representing Legal & General’s fourth Government hub forward funding deal, it follows the acquisition of 3 Glass Wharf, an 107,000 sq ft building in Bristol city centre, 265,976 sq ft of office space at Legal & General and Rightacres’ Central Square scheme in Cardiff, as well as, most recently, 270,000 sq ft at the India Buildings in Liverpool.

Adam Kerr, Head of Annuity Transactions, LGIM Real Assets, said: “This is a great deal for us and will have a meaningful impact on this area of Edinburgh, creating new jobs and driving economic growth. This Government letting will ensure that this heritage asset is redeveloped to the highest standard and will reinvigorate this part of the city centre, blending in with the surrounding landscape which has already undergone regeneration with a new public square.”

Welcoming the deal, Artisan’s projects director Clive Wilding said: “This transaction reflects the strong income stream, covenant strength and rare prime city centre development opportunity offered by New Waverley. It also shows the value we have added by the strong sense of place-making already established at New Waverley. 

“The risk-free nature of the income streams from the UK Government lease and guarantee has attracted significant interest from large institutional investors. The disposal facilitates the recycling of capital into further opportunities as part of Artisan’s stated investment strategy.”

Artisan’s £200 million, 7.5 acre mixed-use scheme seamlessly links Waverley Station with the city’s iconic Royal Mile, forming part of the Old Town’s UNESCO World Heritage site. During the last two years, New Waverley has delivered 400 hotel rooms, including two Whitbread hotels – a Premier Inn and a Hub by Premier Inn - and an Adagio Aparthotel overlooking the Royal Mile.

Edinburgh’s New Waverley - The Facts
  • Delivered by Artisan Real Estate Investors, the £200 million New Waverley development occupies a 7.5 acre site in the city’s Canongate area, linking Waverley Station to the Royal Mile and lying at the heart of the Capital’s historic centre and the UNESCO World Heritage site  
  • Construction started in 2015 with the initial phase delivering two Whitbread Hotels on East Market Street – a Premier Inn and Hub by Premier Inn – with a combined total of 248 rooms. This was the first Hub by Premier Inn (Whitbread’s innovative new boutique hotel format) to be launched outside of London.
  • The second development phase started in 2017 which includes two office buildings providing 190,000 sq. ft. of high-quality grade A office space, 148 apartments and new retail businesses including shops, restaurants and cafes.  
  • The 146-apartment Adagio Aparthotel was completed in late 2016 and faces directly on to the Royal Mile. The four-storey Adagio has been painstakingly constructed behind an existing façade of two 1930s tenement buildings - one of which is the C-listed Sailors Ark building, formerly an ex-serviceman’s hostel which helped feed the city’s homeless before and after the Second World War.   
  • A new £2 million football pitch-sized public square opened in December 2016 becoming the first significant public space to open in the city centre for more than 50 years. The square is linked to the Royal Mile by a cleverly designed covered walkway inspired by the Old Town’s historic ‘Wynds’.
  • Development will start in late 2017 of The C-listed red sandstone Canongate Venture building, one of Edinburgh’s last remaining ‘School Board’ designs of the late-Victorian era, which will become a 21-room luxury aparthotel, managed by Apple Apartments.
  • The Waverley Arches are a row of 19 newly renovated Victorian arches on East Market Street, which were originally constructed in 1875 to create double-height openings beneath the city’s Jeffrey Street. 
  • The Arches now provide something completely different for the city, accommodating some of the most exciting new independent operators to be found anywhere in the UK - whether it’s cutting edge retail and leisure venues, or unique cafes and restaurants.

The New Waverley offices will be arranged across two linked buildings providing some 190,000 sq. ft. of space and offering the highest levels of sustainability and operational efficiency. Employees will benefit from modern, well-lit Grade A office space with added staff amenities including a landscaped roof area providing sweeping views across the Waverley Valley. Work on the office development is currently underway and is due to be completed in summer 2019.

New Waverley has won three place-making awards in 2017 – including best regeneration project for both the Scottish Property Awards and the Royal Institute of Chartered Surveyors (RICS) Awards.

For more information about the progress of New Waverley visit www.newwaverley.com

Artisan Real Estate Investors (www.artisanrei.com)

Artisan is a shareholding partnership between the Sanlam Group, a major South African financial services firm (through its business unit Sanlam International Investment Partners), the Argosy and Attventure Groups and Salt Properties Limited in the Isle of Man.

The organisation was founded in 2008 in the Isle of Man and has fast grown to become a niche provider of property investment advisory services.

Further information

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Olivia Bayliss

Head of Communications

Capital and LGIM Real Assets

Notes to editors

Legal & General Investment Management Real Assets (LGIMRA) is a division of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages £1.28tn in assets (as at 31 December 2020), working with a range of global clients, including pension schemes, sovereign wealth funds, fund distributors and retail investors.

LGIM Real Assets has assets under management of £36.3bn (as at 31 December 2020) and is one of the largest private markets investment managers in the UK. Investing in both debt and equity and across the risk/return spectrum, LGIM Real Assets actively invests in and manages assets across commercial, operational and residential property sectors, as well as infrastructure, real estate, corporate and alternative debt.

Taking a long term view in order to future proof our investments, LGIM Real Assets continues to lead the industry in ESG performance, considering all environmental, social and governance issues at asset level as well as portfolio level. In 2021, we are implementing a strategy as part of our commitment to net zero carbon emissions across the real estate equity business by 2050, and have also committed to measuring social value across 20% of our platform by the end of the year.

(As of June 2021)

IMPORTANT INFORMATION

The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested. Past performance is no guarantee of future results. You should consult an independent investment adviser prior to making any investment in order to determine its suitability to your circumstances.

Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with international businesses in the US, Europe, Middle East and Asia. With almost £1.3 trillion in total assets under management*, we are the UK’s largest investment manager for corporate pension schemes and a UK market leader in pension risk transfer, alternative asset origination, life insurance, workplace pensions and retirement income. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.

* at 30 June 2021