TWO nine-figure deals with investors from overseas have helped investment in Edinburgh offices outstrip last year’s annual total in just six months.

A flurry of significant deals in the second quarter including the £120 million sale of the Standard Life Aberdeen building in St Andrew Square helped push up the total, according to analysis from Knight Frank.

It includes two deals from investors from Korea, taking the total number of agreements for Scotland in the period with investors from the region to four.

The independent commercial property consultancy found that nearly £310m had been invested in the city’s offices between January and June 2019, well ahead of the previous 12 months’ total of £284m.

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More than £290m was spent by investors between April and June alone.

The six-month figure was buoyed by two key deals, including the May sale of 4-8 St Andrew Square to one of Germany’s largest pension funds.

KanAm Grund Group exchanged contracts to acquire the striking building part of a substantial mixed use asset assembled by Aberdeen Standard Investments and developed in conjunction with Peveril Securities.

TK Maxx and restaurant and bar outlets including Vapiano, The Refinery, The Ivy, Wagamama and Gaucho are among tenants.

Standard Life Aberdeen will stay in the building for 20 years under that deal.

In another landmark deal in June, an unnamed South Korean investor agreed the £100m purchase of the Leonardo Innovation Hub at Crewe Toll.

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The 16-acre research and development complex is home to one of Edinburgh’s biggest employers, Italian aerospace, defence and security company Leonardo.

Knight Frank Investment Management, acting as investment manager to the undisclosed investor, purchased the site from owners Brockton Capital in an off-market transaction.

The Leonardo Innovation Hub covers more than 439,000 sq ft of office, laboratory and industrial space.

Employing around 1,800 staff, Leonardo recently signed a new inflation linked 15-year lease at the hub where it has operated since 1943.

The site has a history of innovation and produces cutting edge technology.

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Knight Frank is seeking “similar off-market opportunities in the UK and Europe”, it said. Earlier in the year, a £55m property at Gyle Square was also acquired by Korean investors.

Korean funds have now made four major purchases in Scotland since their first transaction in 2017, including the deal for Glasgow’s 110 St Vincent Street and 122 Waterloo Street.

Knight Frank said demand for office space in Edinburgh has been strong “despite the headwinds caused by a protracted Brexit process”.

Alasdair Steele, head of Scotland commercial at Knight Frank, said: “It’s been a great start to the year in Edinburgh, with a number of large transactions for major assets.

“That we had two nine-figure deals conclude against an uncertain political and macro-economic backdrop is testament to the strength and diversity of demand for prime commercial property in the city.

“There is an almost insatiable appetite among investors for secure long-dated income and prime offices.

“Despite Brexit, Scotland is seen as providing stability at a competitive price.

“What’s noteworthy about most of the major transactions in Edinburgh is that they are being conducted off market by overseas money.

"While it might seem counter-intuitive to limit the number of interested parties by seeking out specific buyers, it’s turning out to be the best way of concluding deals.

"The purchasers know they stand a good chance of acquiring the asset and are willing to pay a premium in return.”