ScotMet sale nets pounds 53m: Bidding adds 13% to price of building

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The Independent Online
SCOTTISH Metropolitan, the biggest property company north of the border, yesterday sold its biggest asset within two months of putting it on the market, for 13 per cent more than the asking price.

Saltire Court, a 200,000sq ft office building in the centre of Edinburgh, was put on the market in August for pounds 46.8m. After an auction involving eight potential buyers, the Abu Dhabi Investment Authority paid pounds 53.1m for it.

With rental income of pounds 3.5m, the deal represents an intitial yield of under 7 per cent, a top price even for a three-year-old building with secure leases.

Saltire Court is 98 per cent let to reliable tenants, including solicitors and accountants persuaded to leave their traditional haunts in the Georgian buildings in the city's Charlotte Square.

ScotMet plunged heavily into losses in 1991, stung by the collapse in property values in the South. After disposals, the company returned to the black last year, with reduced borrowings of pounds 150m supported by net assets of pounds 285m.

Scott Cairns, managing director, said that Saltire Court, representing almost a fifth of ScotMet's net assets, was too big a chunk of the company's portfolio. He said that the proceeds of the sale would be used to buy smaller buildings worth about pounds 5m each.

ScotMet's shares closed 10p higher at 113p.