Metropolitan sells Saltire Court

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The Independent Online
SCOTTISH Metropolitan, the biggest property company north of the border, is selling its largest single asset, a two-year-old Edinburgh office block, writes Tom Stevenson. The sale of Saltire Court represents the final stage in an 18-month disposal programme to reduce debts.

Scott Cairns, managing director, said: 'It was always our intention to sell Saltire Court but at a time of our own choosing. We had already matched our budgeted disposals and this gives us extra flexibility to make further acquisitions in the North.'

The company is inviting offers of pounds 46.8m, a yield of 8 per cent on a rent roll of pounds 3.5m. Tenants include two of Scotland's five biggest law firms and KPMG Peat Marwick, all on 25-year leases, with five-yearly upward-only rent reviews and no break clauses. The building is 92 per cent let.

Mr Cairns said gearing would fall to about 100 per cent after the sale, having been as high as 170 per cent. He added that, having renegotiated short-term bank facilities until October 1995, the company would be able to gear up again for the right opportunities.

Plans include further disposals in the South-east and a concentration on the retail market. The company's return to its roots follows an expensive foray into developments in the south of England. One of its most celebrated mistakes was a Bournemouth development that ended up as a car park and resulted in an pounds 8.6m write-off.

That led, in the year to August 1991, to a pounds 10m profit being reversed into an pounds 8.4m loss and a slashed dividend. Last year there was a pounds 500,000 loss.

The shares, which have more than tripled since a low of 24p last September, added 1p to close yesterday at 82p.