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Lothian Pension Fund has officially acquired a 145-bedroom hotel-anchored, mixed-use development at Hanover Buildings in Edinburgh for £23.4m from Oval Real Estate.
The property, located at 66-84 Rose Street, is let to Hub by Premier Inn. The hotel is secured on a long index-linked lease and generates approximately 70% of the scheme’s total income.
The site also includes five retail and leisure units occupied by Lucy and Yak, William Hill, Cotswold Outdoor, Assaggini and Veeno. The acquisition price reflects a net initial yield of 5.66%.
Colin Finlayson, director of Lismore Real Estate, who advised on the deal, said: “Investor demand for hotels across the UK remains particularly strong and this is increasingly evident in Edinburgh, where global tourism and business travel continue to underpin robust occupancy levels.
“With supply relatively constrained, well-located, income-secure assets such as Hanover Buildings are attracting significant interest and offering compelling long-term returns for our client.”
Nicola Barrett, portfolio manager of Lothian Pension Fund, added: “Hanover Buildings is a high-quality, income-producing asset in a prime city-centre location. The strength of the hotel covenant, combined with diversified retail and leisure income, aligns well with our strategy of securing resilient, long-term real estate investments that deliver stable returns for the Lothian Pension Fund.”
