Edinburgh city centre’s landmark mixed-use development Quartermile, an investment that is owned by Moorfield Real Estate Fund III, has secured an £80m funding deal to enable it to speculatively develop its remaining two office buildings. 

It is believed to be one of the largest speculative office funding deals to have ever been undertaken in Scotland. The deal covers two office buildings at the development, Quartermile 3 and Quartermile 4. 

The deal has been struck with M&G Real Estate, the investment arm of insurer Prudential plc, and will be the first speculative Grade A office development to be seen in the city centre for several years. It is expected to create between 300-400 construction jobs over the build period. 

Construction on the seven-storey Quartermile 4 building will start in July 2014 and once finished it will comprise 130,600 sq ft of office space, including 12,490 sq ft of retail accommodation. Completion is scheduled for early 2016, with the development of the six-storey 72,991 sq ft Quartermile 3 office building to follow. 

Quartermile managing director, Paul Curran, said: “The deal is excellent news for both Quartermile and Edinburgh.

Construction of Quartemile 4 will commence in July this year making it the first speculative grade A office 

development to be undertaken in the city for a number of years. We are already seeing strong occupational interest and are working with our agents to secure lettings." 

The two buildings will ultimately provide Grade A office space for over 2,000 people and will complete the office component at the development. Companies locating to Quartermile will be alongside existing high profile occupiers including IBM, Investec and flight search business Skyscanner.  

Commenting on the deal, John Fyfield, director, development at M&G Real Estate, said: “We are very pleased to have secured the final office phase of this very successful urban regeneration project off- market. At a time when there is a real lack of Grade A office space in Edinburgh the commitment to speculatively develop these buildings ensures they will be delivered into a market where there is little competition.”

In September 2013 Moorfield Group acquired Quartermile on behalf of Moorfield Real Estate Fund III. 

Charles Ferguson Davie, Chief Investment Officer at Moorfield Group, said: ““The level of investment is testimony to Quartermile’s continued momentum and also demonstrates the growing confidence in Edinburgh’s office and property market.

Quartermile 3 and 4 will provide much needed Grade A office space that will undoubtedly contribute to the city’s ongoing economic development.” 

Quartermile was advised by the Edinburgh office of property agents Montagu Evans, M&G Real Estate was advised by Jones Lang LaSalle. 

Quartermile’s retail portfolio includes Peter’s Yard, Sainsbury’s Local, Starbucks, Fitness Chicks, Pure Gym, Looking Glass Books, Edinburgh City Pads, Savour To Go and Malaysian restaurant Nanyang. It is also home to the UK’s first Marriott Residence Inn.

Quartermile’s residential offer also continues to thrive. Over 560 apartments have been sold to date and the development has experienced year on year increase in sales for three years, with growth expected to continue throughout 2014 and beyond. 

The latest phase of new-build apartments, City Meadows, was unveiled in April offering a choice of 98 one, two and three bedroom apartments with a luxurious four-bedroom penthouse.

Once complete, Quartermile will comprise over 323,000 sq ft of Grade A office accommodation, 900 apartments, 108,000 sq ft of retail and leisure space and seven acres of open landscaping. The development is expected to be completed in 2018.

To find out more about pre-let opportunities at Quartermile 3 and 4, visit the dedicated office page.