Bumper deal sees sale of Edinburgh home to The Ivy

● German pension fund acquires 4-8 St Andrew Square in heart of city centre

A German pension fund has acquired a major office, retail and leisure development in the heart of Edinburgh marking the biggest mixed-use investment deal in Scotland in nearly three years.

The building sat 4-8 St Andrew Square house offices for pensions giant Standard Life Aberdeen( S LA ), a number of restaurants including The Refinery, The Ivy and Gaucho, as well as a large TK Maxx store.

SLA’S investment arm, Aberdeen Standard Investments, andPeveril Securities were responsible for re developing the city centre site in 2016 under a joint venture.

Kanam Grund Group said it had exchanged contracts to acquire 4-8 St Andrew Square on behalf of German pension fund AVWL – one of the country’s largest occupational pension funds with assets under management of €13.8 billion (£12.2 bn ), which includes property investments of about €3bn. Kanam Grund will also be in charge of the ongoing asset management.

The sale is understood to represent the biggest mixeduse investment deal north of the Border since the St James centre transaction in October 2016, ahead of that site’s £1bn redevelopment.

Prior to the St Andrew Square sale, the Standard Life Pooled Property Pension Fund agreed a lease variation with SLA for a period of 20 years, “reaffirming its commitment to the building”.

Some 60 percent of the income is derived from the offices with the remaining 40 per cent from the retail side and restaurants.

Financial details surrounding the deal have not been disclosed.

David Stewart, fund manager, Aberdeen Standard Investments, said: “The development and sale has been a resounding financial success for investors within the Standard Life Pooled Pension Property Fund.

“At the same time, we take great pride in having made a positive contribution to the local environment, develop - ing a building that meets high levels of sustainability and breathing new life into a strategic part of the city.

“We have retained the period buildings forming 1-3 St Andrew Square as long-term investments and remain confident in the future success of the area.”

Ralph Jones of Peveril Securities added: “The sale marks the successful completion of the joint venture with Aberdeen Standard Investments and the business plan for the development.

“As one of the most important Scottish developments in recent years, the scheme led the renaissance of St Andrew Square and the surrounding area.”

Savills acted on behalf of the joint venture and CBRE represented the buyer in the deal.

Work to re develop the St Andrew Square site began in 2014. The property is close to Waverley station and the new St James development, which is due to open next year, offering shops, restaurants, a luxury hotel and apartments.