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INVESTMENT OPPORTUNITYPRIME MIXED-USE OFFICE& RETAIL INVESTMENTGEORGE STREET, EDINBURGH
INVESTMENTSUMMARYPRIME MIXED-USE OFFICE AND RETAILINVESTMENT OPPORTUNITYOffers in excess of 5,900,000(Five Million Nine HundredThousand Pounds) are sought forour client’s heritable interest in theproperty exclusive of VAT. A purchaseat this level would provide a net initialyield of 7.52% assuming purchaser’scosts at 6.61%.90-92 GEORGE STREET, EDINBURGHProposalMULTI LET TO SIX TENANTS INCLUDINGGANT AND GRAYLING CAPITALLOCATED ON GEORGE STREET, ONE OFEDINBURGH’S PRIMARY RETAILING STREETSRETAIL RENTS AVERAGE 76PSF ITZAWITH THE TENANTS HAVING BEEN INOCCUPATION FOR AN AVERAGE OF20 YEARSPASSING RENT OF 472,748 PER ANNUMACCOMMODATION OVER GROUND,BASEMENT AND THREE UPPER FLOORSTHE PROPERTY IS A GRADE A LISTEDBUILDING WITH A TOTAL NET INTERNALAREA OF 16,621 SQ FTHERITABLE INTEREST (SCOTTISHEQUIVALENT OF ENGLISH FREEHOLD)2
90-92 GEORGE STREET, EDINBURGH3
EDINBURGH ISTHE CAPITAL CITYOF SCOTLANDAND THE LARGESTFINANCIALCENTRE IN THE UKOUTSIDE LONDON20%THE POPULATION OFEDINBURGH IS DUE TOGROW BY 20% BY 2039EDINBURGH IS ONE OF THEMOST PROSPEROUS PARTSOF THE UK AND HAS THESTRONGEST ECONOMYOUTSIDE LONDONTHE CITY’S INSTITUTIONSHAVE OVER 500 BILLIONOF ASSETS UNDERMANAGEMENT6%1stEDINBURGH’S GVA ISFORECAST TO GROWAT 6% P.A. FOR THENEXT 5 YEARS 1.87 BILLIONTOURISTEXPENDITUREEDINBURGH UNIVERSITYIS RANKED AS THE BESTIN SCOTLAND AND 5THIN THE UK1.6 MILLIONREGIONALCATCHMENTOVER 80,000 STUDENTSSTUDY ACROSS EDINBURGH’SUNIVERSITIES AND COLLEGES2ND LARGESTSHOPPINGDESTINATION INSCOTLAND90-92 GEORGE STREET, EDINBURGHLOCATION90-92 George Street is located on one of Edinburgh’sprimary shopping streets. It connects the prominent StAndrew Square to the east, filled by a number of high-classrestaurants such as Hawksmoor, The Ivy Café and Dishoom,with the gardens of Charlotte Square to the west.George Street is home to quality mixed-use occupiersmaking it a lifestyle destination. Retailers includeJo Malone, Hollister, Joules, Lululemon, The WhiteCompany, Anthropology and Hobbs. Consumersalso benefit from a number of prime food and drinkofferings including Tiger Lily, Contini, Fazenda andthe Dome along with luxury hotels such as Le Mondeand InterContinental Edinburgh the George. Diageo’smulti-million pound Johnnie Walker Experience openedon Princes Street in September 2021 and is the largestsingle investment programme of its kind in Scottishwhisky tourism.Plans by Edinburgh City Council to pedestrianise GeorgeStreet will see the area adopt a European-style design,utilising the wide street to create a safer, accessible andmore sustainable space. Efficient transport to the areawill be supplied by trams and buses. More informationcan be found on the City of Edinburgh Council website.4
OFFICES IN EDINBURGHEdinburgh is the second largest shopping destination in Scotlandand is regarded as one of the strongest retailing centres in theUK. George Street in particular is home to an array of higher endbrands offering a complimentary mix of unit sizes compared toPrinces Street’s traditionally larger format stores. Princes Street isexpected to go through a positive evolution into a more mixed usestreet as large department stores are converted into alternativeuses. George Street is expected to continue as the lifestyle andhigh end retailers location of choice.The office market in Edinburgh is summarised by a supply-demand imbalancedriven by a limited development pipeline and increasing requirements bydiverse pool of occupiers. Across all grades there is a limited supply ofavailable space including traditional townhouse accommodation. Demand fromalternative uses has meant that almost one million square feet of office spacehas been redeveloped in the last eight years. This lack of supply has resulted inrental growth and recent transactions have reached 40psf, with the marketrebounding strongly from various government lockdowns.The nearby 1bn re-development of St James Quarter to the eastof George Street has encouraged a flurry of letting activity andis stimulating the retail market for the area. The vacancies thatoccurred during the pandemic are now being absorbed as tenantdemand increases. We are aware that eight units on the street arecurrently under offer, significantly reducing vacancy levels.George Street remains an attractive office location offering a wide variety ofamenities. In addition, traditional townhouse accommodation offers ideal suite sizesfor a high proportion of the Edinburgh market looking to locate in central Edinburgh.Prime yields in the city centre are reported at 4.5%, which is lower thanpre-Covid 19 levels.90-92 GEORGESTREET IS LOCATEDON THE MAJORSHOPPING STREETAND CENTRALTHOROUGHFAREIN EDINBURGH CITYCENTRE90-92 GEORGE STREET, EDINBURGHRETAILING IN EDINBURGH5
TOINVERKEITHINGNORTH QUEENSFERRYSTKWITLEWSOUTH GYLESTATIONIOHERMISTON ASSA720LO NLAYO RAK PLCEBus nioStatHEROWR IOTSTREENQUEETTLESTDREW24 25 262729ST ANRESQUA23STREET28EETMOURS STTHENDCEPRINrleyWave ionStatLOT H IANHI G HGEOIRGEROADEdinburgh CastleTSTREEGEBRIDROSE10 1131 2Edinburgh Airport is located 8 miles west of the CityCentre. It connects Edinburgh by air to 158 destinationsworldwide including major international and domesticcities. In 2019 it recorded as high as 14.7 millionpassengers travelling through it annually. EdinburghAirport is a 32 minute journey on the Edinburgh Tramfrom the subject property.CALTON HILLDREGENT R15THNOR8STRE21 22ST JAMESCENTRER STTLE S13 14619 20STTHISOVEE1816 17K STRGGEOERICCAST9 125 74FREDSTHILLTLEAIRETHANTHISRDLASSWADETNEMO RUMBDONSTRAITONTND SERLAE STERREEA STESTHOWUCINDIG LOTHNORSTWAVERLEYSTATIONEDINBURGH Vans3. Urban Outfitters4. GANT5. Space NK6. The White Company Y P LACEA7.Jo Malone8. Tiso9. White Stuff10. ECCO11. Jones Bootmaker12. JoulesLYN P13. HackettALB14. Hollister15. All Saints16. Jack Wills17. Sweaty BettyELOT T18. Church’sCHARQU19. EElululemonNSFE Hansen20. HellyRRY21. Hobbs STRESQUA22. L.K Bennet23. Charles Tyrwhitt24. Anthropologie25. MoltonBrownST26.L E MeanderLILVMint VelvetE27.M28. Marks & SpencerPL29. Harvey NicholsKICWDANSHRTELNT 0BRBERSTA90DASCUMDLANOEMETDUNSTDALMENYARRESTThe property is located on the prominent retailEdinburgh is served by two main rail stations, WaverleyACEstretch of George Street. Retailer connectivityand Haymarket. WaverleyE P Lstation is centrally locatedEYRGLENOGLE ROADwill be enhanced upon completion of plansfor the main retailing area of Edinburgh and is situatedGRANGEby Edinburgh City Council to pedestrianiseonPrinces Street, under half a mile from the newWCRICKETN ROGeorgeStreet.RSOStJamesQuarter and 10 minute walk from theEDC LU BHENproperty. Waverley Station connects the city centrewith incoming retailersRAEBUO W from surrounding areas andRN PLAES RCEF E T T per hour to Glasgow.operates 8 trainsSOUTH RTHROADBRIDGERORAILLDQUEENSFERRYCROSSINGALN RDNAWALKB R O U G H TOOithof LeCDWa t e r90-92 GEORGE STREET, EDINBURGHMCONNECTIVITYRISETRWATRAMCALTON RDThe Edinburgh Tram Network has been running since2014 and meanders through the City Centre. It hasGATEterminuses at York Place and EdinburghONAirport,CANwith a current extension programme taking the trackdown through Leith and Newhaven to stretch to animpressive 11.6 miles route. The nearest tram stopROtoADDOOthe property is on Princes Street, only a 3 minuteLYRHOwalk away.6V
ST ANDREWSQUAREW HOTELWAVERLEYTRAIN STATIONQUEEN EETPRINCESSTREETEDINBURGHCASTLE90-92 GEORGE STREET, EDINBURGHST. UAREEXCHANGEDISTRICT7
AN ATTRACTIVE GRADEB LISTED MIXED USEBLOCK COMPRISINGRETAIL ON THELOWER FLOORS ANDATTRACTIVE OFFICEACCOMMODATION ONTHE THREE UPPERFLOORS90-92 GEORGE STREET, EDINBURGHDESCRIPTIONThe property occupies a prime position on GeorgeStreet and is arranged over basement, ground and threeupper floors. The property is Category A listed and is ofmasonry construction under a pitched slate roof.The retailers use the ground floor units as retailingspace with the basement consisting of storage, officeand amenity. The retail units have individual accesswith the offices having a separate entrance to theupper floors. The three upper floors are used asoffices. The office accommodation ranges from 856sq ft – 3,270 sq ft.The total net internal area of the property is 16,621sq ft and it produces an annual income of 472,748.The property offers a WAULT to breaks of 1.43 yearswith 1.84 years to expiry.TENANCY SCHEDULETenantDescriptionVacant - Guarantee3rd Floor WestArea (sqft)Zone A AreaLease StartLease ExpiryBreak Option2,209Rent psf 48,602 22.00 21,400 25.00 71,940 22.00ITZA (psf)WAULTto breakWAULTto expiryComment18 month rent and service charge guarantee.Grayling Capital LLP3rd Floor East8562nd Floor West3,270Sheridan Property Consultants Ltd2nd Floor East87901/09/202131/08/202601/09/2024 17,580 20.002.314.31Break option subject to provision of 6 months priorwritten notice. Service charge cap of 5,000.Kettle Collective Limited1st Floor West3,01227/02/201526/02/202526/02/2023 73,776 24.490.792.79Service charge cap of 27,416.980.750.75Orinsen in occupation as sub-tenant. Current servicecharge cap of 6,861.11. Orinsen are in the process ofagreeing a reversionary lease to commence at expiry ofthe current lease. New lease will be for a five year termat the current passing rent. The tenant will benefit fromnine months’ rent free.1st Floor East858Gant UK Limited90/92 - Ground Floor & Basement2,812Tessuti Retail LimitedGround Floor and Basement2,725Total16,62112/10/2022Rent paVacant - GuaranteeFull Circle Development ConsultingLimited (Sub-let to Orinsen)13/10/2017Rent Review0.420.42Service charge cap of 6,858.9118 month rent and service charge guarantee.08/09/201726/02/2023 21,4501,43211/01/198829/11/2024 170,000 118.722.552.55Tenant is paying a reduced rent of 85,000 per annumuntil 31st July 2023. Vendor to top up rent free periodto 170,000 per annum.1,43202/11/201601/11/2022 48,000 33.520.170.47Rolling mutual break option, subject to two months’notice. Lease guaranteed by R. D. Scott Limited.1.181.84 472,748 25.008
Gant – D&B Rating 3A3Founded in Connecticut in 1949, Gant are an American Swedish clothing brand. Gant beganas specialised shirt makers producing high quality formal wear before diversifying to provide arange of male and female clothing and accessories. Today, Gant have a global presence in over 70markets, 750 stores and 4,000 selected retailers. Gant have a Dun and Bradstreet ratingof 3A3.YearSales TurnoverNet ProfitNet Assets2019-2020 50,272,000- 2,779,000 7,354,4802018-2019 63,453,333- 51,221 9,839,7742017-2018 58,778,000- 1,553,000 10,102,150Kettle Collective Limited – D&B Rating 1A3Kettle Collective Limited is an award winning international architecture and design studiobased in the UK. Working in design and collaboration, they operate throughout Europe, NorthAfrica and the Middles East. They have a global spread with studios in Edinburgh, Dubai,Muscat and Hong Kong and assist in creating sustainable buildings and communities across theworld. Kettle Collective have a Dun and Bradstreet rating of 1A3, reflecting a low-moderatebusiness risk and reported 920,904 in Net Assets in 2020.90-92 GEORGE STREET, EDINBURGHTENANT COVENANTSTesutti RetailOrinsen – D&B Rating C1Orinsen is an independent commercial property consultancy specialising in property leasing,acquisition, disposal and asset management. Orinsen work with a diverse range of clientsinclude Cala Homes, CBRE Investment Management, West Range Property Group, Legal andGeneral and Aviva. Orinsen has a Dun and Bradstreet rating of C1 reflecting it as minimumrisk and reported 286,588 of Net Assets at the end of 2021.Tesutti Retail is trading as Xile from the unit. Xile is a Scottish premium menswear retailer withstores across Scotland’s Central Belt. Through their website they have a global reach displayingcurrent brands and styles. They stock a number of world-class names such as Barbour, Adidasand Converse. The Tessuti lease is guaranteed by R.D. Scott Limited a subsidiary of thePentland Group who own Speedo, Canterbury, Berghaus and JD Sports. The Tessuti Retaillease is guaranteed by R.D. Scott Limited who are a subsidiary of Pentland Brands. In theirlatest accounts R.D. Scott Limited had shareholder funds of 7.938M.Sheridan Keane – D&B Rating A1Grayling Capital – D&B Rating N3Grayling Capital is a private investment group based in Edinburgh focusing on investmentin sustainable industries. They focus primarily on the real estate sector but are involved inother investments opportunities in addition. The principals have backgrounds from a rangeof markets including private equity, banking and corporate finance and surveying. GraylingCapital have a Dun and Bradstreet rating of N3, reflecting a low-moderate business risk andreported 116,962 in Total Current Assets in 2021.Sheridan Keane is a leading independent property investment development advisory firm. Theywork closesly with clients to advise on investment sales and acquisitions, development andfunding and strategic asset management. Sheridan Keane handle portfolios as well as singleassets as well as forward funding and forward purchase opportunities. They have a Dun andBradstreet rating of A1, reflecting a low-moderate business risk and reported 443,041 in NetAssets in 2020.9
SERVICE CHARGETENUREOPPORTUNITIESThe service charge budget for 2022 reflects 7.06per sq ft and 1.05 per sq ft for the office and retailelements respectively. Full details are available onthe date site.Heritable Interest (ScottishEquivalent of English Freehold).Potential asset management opportunities include: Letting the vacant office spaceSeek to extend existing office leases atenhanced rents given current low base rentsEPC RATINGThe EPC rating for the office element is C-40and the rating for the retail element is G-104. Acopy of the EPC Report is available upon request.VATIt is anticipated that the salewill be treated as a Transfer ofGoing Concern and thereforeno VAT will be payable on thepurchase price.ProposalOffers in excess of 5,900,000 (FiveMillion Nine Hundred ThousandPounds) are sought for our client’sheritable interest in the propertyexclusive of VAT. A purchase at thislevel would provide a net initial yieldof 7.52% assuming purchaser’s costsat 6.61%.90-92 GEORGE STREET, EDINBURGHASSET MANAGEMENTFURTHERINFORMATIONFor further information or to arrange aninspection please contact:Alasdair M SteeleM: 447808 479 333E: alasdair.steele@knightfrank.comEuan KellyM: 44 7770 016 476E: euan.kelly@knightfrank.comSam WaterworthM: 44 7810 657 744E: sam.waterworth@knightfrank.comHamish Graham-CampbellM: 44 7814 935 377E: hamish.graham-campbell@knightfrank.com10
9092Knight Frank LLP give notice to anyone who may read these particulars as follows: 1. Particulars: These particulars are not an offer or contract, nor part of one. You should not rely on statements by Knight Frank LLP in the particulars or by word of mouthor in writing (“information”) as being factually accurate about the property, its condition or its value. Neither Knight Frank LLP nor any joint agent has any authority to make any representations about the property, and accordingly any information given isentirely without responsibility on the part of the agents, seller(s) or lessor(s). 2. Photos etc: The photographs show only certain parts of the property as they appeared at the time they were taken. Areas, measurements and distances given are approximateonly. 3. Regulations etc: Any reference to alterations to, or use of, any part of the property does not mean that any necessary planning, building regulations or other consent has been obtained. A buyer or lessee must find out by inspection or in other waysthat these matters have been properly dealt with and that all information is correct. 4. VAT: The VAT position relating to the property may change without notice. Knight Frank LLP is a limited liability partnership registered in England with registered numberProduced by DesignworksOC305934. Our registered office is 55 Baker Street, London W1U 8AN, where you may look at a list of members’ names. May 2022.
NEXT 5 YEARS 1.6 MILLION REGIONAL CATCHMENT. EDINBURGH IS ONE OF THE . MOST PROSPEROUS PARTS . OF THE UK AND HAS THE . STRONGEST ECONOMY OUTSIDE LONDON EDINBURGH UNIVERSITY . IS RANKED AS THE BEST . IN SCOTLAND AND 5TH IN THE UK. 1st. 20% 6%. 90-92 George Street is located on one of Edinburgh's primary shopping streets. It connects the .
