THE Edinburgh office market has been handed a major vote of confidence after the Grade A Exchange Place One was sold in an off-market deal.

The 114,748 square foot building, which is located on Semple Street and offers “impressive views” of Edinburgh Castle, has been purchased by CBRE Investment Management UK Property PAIF from Macquarie Asset Management.

Property firm CBRE, which acted on behalf of the buyer, declared the deal shows “there continues to be strong interest for high quality assets in the right locations”, despite the pandemic. It said the new owner is planning to invest further in the building.

Tenants at Exchange Place One include BlackRock, which occupies four floors, Hymans Robertson, Cundalls, Cameron Hume and Evans Cycles.

Alistair Wright, director of CBRE Scotland, said: “It is great news that we have managed to secure an off-market purchase of this well-known Grade A office building in a rarely available location in Edinburgh for CBRE Investment Management.

“The acquisition of Exchange Place One, which currently has a BREEAM ‘Very Good’ rating, provides the Fund with a unique opportunity to create a best-in-class office building that meets strong market demand for sustainable, central office space with large floorplates. The exciting plans for the asset include a comprehensive internal refurbishment with significant focus on improving the building’s ESG credentials that will include a full decarbonisation strategy.

“The Fund will be making a substantial investment showing that despite the pandemic there continues to be strong interest for high quality assets in the right locations.”

CBRE declared that “market dynamics are highly favourable” in the Edinburgh office market, with the Grade A city centre vacancy rate sitting ay 2.2 per cent. It said this reflects a constrained supply and strong demand for high-quality office accommodation.

Jamie Phillips, fund manager of the CBRE UK Property PAIF at CBRE Investment Management, said: “This is a really exciting opportunity to acquire a Grade A office building in a fantastic location.

"Edinburgh is a vibrant city and its status as a UNESCO World Heritage site places certain constraint on future commercial development within the city. This is in part underpinning the undersupply of Grade A stock, which is at its lowest levels for 20 years.

“Exchange Place One has impressive floor plates, which can be hard to come by in Edinburgh. Our business plan is focused on taking the building to the next level, creating a top-quality office building that gives Edinburgh’s corporate occupiers a sense of place and the strong sustainability credentials that tenants are quite rightly demanding.”