A Middle Eastern sovereign wealth investor has bought an industrial estate in the Borders in a multi-million-pound deal that signals confidence in the prospects for the economy in an area that has faced tough times.

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Property asset manager M7 said it had bought the Tweedbank Industrial Estate in Galashiels for £4.57 million on behalf of a buyer that invests funds amassed by a Middle Eastern state without detailing which one.

M7 said the purchase of the estate reflected its belief in the prospect of it generating good returns from investing in the industrial occupier market in the UK.

The uncertainty around Brexit does not appear to have dented its enthusiasm for the sector.

M7 said the deal also underpinned its commitment to the Scottish market after a very active 2018, with a range of further transactions in the pipeline.

The investor highlighted the significance of recent developments in the area around the Tweedbank estate, which is the largest of its kind in the Scottish Borders.

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The estate lies close to the Tweedbank Railway Station. This is the last on the Borders Railway line linking Edinburgh with the Borders, which opened in 2016.

“The surrounding area is subject to wider development proposals including a new Premier Inn and business space, which are expected to enhance the estate’s position as the commercial centre of the local economy,” said M7.

The deal comes amid hopes that brighter times are in prospect for Borders towns which were hit hard by the demise of the textile industry, a mainstay of the region’s economy for years.

Champions of the £294m Borders Railway claim it has already helped to boost activity in the area after carrying four million passengers in its first three years.

The Royal Town Planning Institute has said the line has encouraged businesses to grow and create jobs in the area and powered a significant rise in visitor numbers, leading to an increase in tourism employment in the Borders.

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The new owner of the Tweedbank Industrial Estate bought the asset from Catalyst Capital, which said it had restored it to near full occupancy after making improvements to buildings.

A unit on the estate was let last year to Mossburn Distillers,which developed the Torabhaig distillery on Skye and plans to open one in the Borders town of Jedburgh. This is expected to feature a 200-seat restaurant and visitor centre.

Scottish Borders Council has said the success of the Borders Railway has boosted the case for the line to be extended to Hawick and Carlisle. Regarding the industrial estate deal, a spokesperson said: “We welcome this investment into the Scottish Borders, especially given the Council’s own commitment to maximising the economic benefits of the Borders Railway at its current terminus at Tweedbank.”

Politicians expect official initiatives will boost activity in southern Scotland in coming years.

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The Scottish Government plans to establish a dedicated South of Scotland enterprise agency.

A Holyrood committee report on the relevant bill said it was clear the area faced a significant number of economic, social and geographic challenges which were not being sufficiently addressed through current economic support mechanisms.

Challenges it cited included an ageing population with an out-migration of young people and transport and digital connectivity issues.

In March the Scottish and UK Governments agreed to provide £345m to boost development through the Borderlands Growth Deal. This covers the Scottish Borders and Dumfries and Galloway regions as well as Northumberland, Cumbria and Carlisle City.

The Scottish Government plans to invest up to £85m over 10 years under the deal to drive inclusive growth.