US bank makes Edinburgh flit in capital’s biggest commercial letting of the year

Global financial services company State Street Bank is taking 65,628 sq ft of office space in Edinburgh.

Property developer Quartermile Developments announced the pre-letting within its new £35m six-storey Quartermile 3 office building at 525 Ferry Road, Edinburgh within the Quartermile development, achieving the capital’s biggest letting this year.

Boston, Massachusetts headquartered State Street will relocate all 800 staff from its current premises to the £750m mixed-use development.

State Street will be based in the top five floors of the 72,991 sq ft Grade A building, leaving only the remaining 7,363 sq ft ground floor at Quartermile 3 to be occupied.

The fit out of the Foster + Partners-designed office accommodation is being incorporated into the build programme meaning State Street’s occupation is expected to commence in early 2018.

State Street is the first to sign on the new offices and has agreed a 15-year lease. The values relating to the deal are undisclosed.

Quartermile 3 is the final office building to be constructed at the award-winning development which is an investment managed by private property investment company Moorfield Group.

Funded by M&G Real Estate, construction of Quartermile 3 is well underway and will complete the suite of four office buildings at the development.

Adjacent to Quartermile 3 is the £50m seven-storey Quartermile 4 office building. Totalling 128,600 sq ft, the building was 100 per cent let four months before practical completion. M&G Real Estate provided £80m of funding in 2014 for both buildings to be speculatively developed.

Paul Curran, managing director of Edinburgh-based Quartermile Developments, said: “State Street’s decision to move to Quartermile further endorses the strength of Edinburgh’s commercial property market and our development’s reputation as the optimum place in the city for progressive businesses.

“Quartermile has been specifically designed to provide commercial occupiers with an intelligent combination of positive factors including office design, public space and retail outlets, which cannot be replicated elsewhere in the city.

“This has proven hugely attractive to businesses, which is demonstrated by all the completed office buildings being 100 per cent occupied, and we are very proud that State Street will soon be benefiting from everything Quartermile offers.

“With Quartermile 3’s ground floor representing the final opportunity for businesses to locate to our development, we are talking to a number of potential occupiers and hope to be able to make further positive announcements in the near future.”

State Street was founded in 1792, has revenues of $10.76bn (£8.62bn) and offices in 30 countries across the globe. The company is responsible for 11 per cent of the world’s assets.

Aaron Pope, director, asset management at M&G Real Estate, said: “We recognised the investment opportunity Quartermile presented as Edinburgh’s prime residential and commercial location. The successful pre-letting of Quartermile 4 in its entirety before practical completion and Edinburgh’s largest deal in 2017 having now been secured at Quartermile 3 reinforce our decision to fund the buildings’ speculative development and affirms the scheme’s position as one of the most significant new office developments in Scotland.”

Quartermile Developments was advised on the deal by agents CBRE and Montagu Evans with legal advice provided by Brodies. State Street’s advisors are undisclosed.

Current commercial occupiers at Quartermile include FanDuel, Skyscanner, Cirrus Logic, Mercer, Investec Wealth and Investment, IBM, Morton Fraser, Maclay Murray & Spens and the Scotch Whisky Association.

Quartermile is expected to be completed in 2018. When finished, the development will provide Edinburgh with over 1,000 apartments - of which more than 650 are already occupied and another 176 under construction – along with 370,000 sq ft of Grade A office accommodation, 65,000 sq ft of retail and leisure space and seven acres of open landscaping.