About the development opportunity

The proposal comprises a number of shops on the pre-eminent shopping street in Edinburgh, that have become vacant due to the opening of a new shopping centre in the city. Subject to planning permission being gained, these ex-retail units will be converted to a high-quality hotel scheme, providing over 300 keys and will overlook the world-famous Edinburgh Castle and Old Town.

Investment rationale and value creation

Princes Street is suffering currently from a number of vacant units, following the opening of the St James Centre, which has attracted many retailers to locate there. The city would like to see the regeneration of Princes Street and the creation of a brand-new hotel can be an integral part of this scheme.

An agreement for lease has been signed with a well-known hotel operator to take the completed building. Over the next few years, planning permission will be obtained to change the use of the scheme, followed by construction, with completion expected in 2025. A brand-new hotel in the centre of Edinburgh, off a long lease to a high-quality hotel operator, should be well received by the investment market.

LaSalle Global Solutions has pooled commitments from our clients to be the lead investors on the scheme, alongside the underlying General Partner.

Environmental credentials

The intention is that the development will be one of Scotland’s first net zero carbon hotels with a BREEAM rating of “Excellent.”

The project is being delivered with the following additional objectives:

• 100% diversion of all construction and demolition waste from landfill.

• Maximise the reuse of existing on-site materials to reduce embodied carbon and create social value.

• Design for energy efficiency in operation including the use of renewable technologies and water efficiency.

• Design for future reuse and adaptability.

About the building

20 Tuas South Avenue is comprised of three industrial buildings totalling over 150,000 square meters in the Tuas submarket of Singapore. Tuas is one of the major industrial submarkets in Singapore and is well supported by an extensive road network. The asset is close to another major industrial region, Jurong, which is set to be Singapore’s second central business district, under the Master Plan. The future Tuas Mega Port, the largest port in Singapore opening progressively from 2021 onwards, is also less than 5 kilometers from the property.

Sitting over 25 hectares, the property has an attractive land tenure of more than 45 years remaining, which is uncommon for industrial assets in Singapore. The existing gross floor area (GFA) of the property is much lower than the maximum allowable GFA, indicating a total of approximately 100,000 square meters of development potential.

Investment rationale and value creation

The existing property is master leased to a quality tenant for a long-term lease. To utilize the underdeveloped GFA, the development was split into two phases to construct a four-story and a two-story warehouse to utilize approximately 100,000 square meters of undeveloped GFA. The new development is expected to complete by end of 2022, and the property will be multi-tenanted with a master-lease tenant anchoring 60% of the space.

LaSalle GPS has pooled commitments from our clients to secure appropriate governance rights such as an AC member seat, to actively monitor and control various aspects of the project, alongside working together with the underlying General Partner.

Future plans

The leasing of the development portion has been progressing well with key tenants being secured. With the property achieving stabilized occupancy and construction completed in December 2022, LaSalle GPS will focus on potential divestment in late 2023.