The Abu Dhabi Investment Authority (ADIA) has pulled Edinburgh’s landmark Saltire Court office building from the market after offers fell short of the £69m asking price.
The sovereign wealth fund put the 180,000 sq ft property up for sale in September through Cushman & Wakefield (C&W) at a 6.54% yield.
But despite strong interest from investors, including Columbia Threadneedle Investments and AEW Europe, the highest bids came in at around the £65m mark, market sources said.
“It’s disappointing. It’s a great building,” one local market source said.
The prospect of re-letting the vacant space in the office also influenced the decision not to proceed with a sale. Since September, strong interest has emerged in the 30,000 sq ft of space remaining in the building across two floors, which have a quoting rent of £26.50/sq ft, sources said.
Edinburgh defying gloomy predictions
Last week, JLL said office take-up in Edinburgh this year was on course to defy some of the gloomier predictions made following the EU referendum. In total, 134,462 sq ft of office space was let across 44 deals in the third quarter - only marginally down on the previous quarter.
The earlier decision by ADIA to put Saltire Court on sale was unexpected because the sovereign wealth fund rarely ever sells assets. However, it came at a time of falling oil prices, which has put pressure on the finances of the capital of the United Arab Emirates.
Saltire Court produces rent of £4.8m a year and boasts blue-chip tenants including KPMG, Deloitte, and law firm CMS Cameron McKenna.
It is considered one of the best offices in Edinburgh and is well located at the base of Castle Rock, giving it uninterrupted views of Edinburgh Castle. C&W declined to comment.