DRUM Property Group is set to lead a £200 million transformation of Edinburgh’s Port Hamilton building, with the complex set to become Lloyds Banking Group’s main base in Scotland following completion of the works in 2027.
Located in the city’s financial district, the 282,000 sq. ft. Port Hamilton building has been home to Scottish Widows for almost 30 years. The building reaches up to eight storeys and features a distinctive curved roof.
In what has been described as an ‘innovative deal structure’, Drum will assume control of the property and take responsibility for redeveloping the building as part of a forward funding agreement. Port Hamilton will remain the head office for the pensions and investments business as Drum has also concluded a pre-letting agreement with Lloyds Banking Group which will see the firm enter a 21-year lease after the transformation works are expected to be completed in 2027.
Graeme Bone, group MD at Drum Property Group, said, “The £200m redevelopment of Port Hamilton presents an exceptional opportunity for Lloyds Banking Group to upgrade and enhance one of Edinburgh’s landmark buildings and deliver an exceptional working environment for Lloyds colleagues in an unrivalled city centre location. We are particularly proud of securing one of Edinburgh’s largest ever office pre-letting deals.
“The level of investment, structure and net zero objectives of the Port Hamilton redevelopment sends out a very strong message for the future of the city centre office market. It also marks another exciting addition to our proven track record in delivering major office facilities for both corporate and government occupiers.”
The Port Hamilton redevelopment is part of Lloyds Banking Group’s wider drive to create a more sustainable office footprint across the UK and contribute to its net zero goal. It follows the refurbishment of its Bristol office in 2022 and a move to the ‘most energy-efficient office building in Leeds’ last year.
Chira Barua, CEO of Scottish Widows, added, “The fintech scene in Scotland is buzzing and we’re committed to staying right in the centre of it. We’ve made huge progress in connecting customers with their financial futures and we’re starting to see how powerful digital engagement and gamification will be in the future. There’s huge potential to help make a real difference for our customers’ lives and we’re right out in front building all the parts we need to innovate in a massive way.”
Sharon Doherty, chief people & places officer, Lloyds Banking Group, said, “We want to create a more modern and sustainable workspace in Edinburgh where our colleagues enjoy working so that we’re in the best place to serve our 27 million customers in more ways with the things that matter to them.”
HSBC Asset Management advised the building owners on the transaction. In concluding the Port Hamilton transaction, Knight Frank acted as commercial property agents for Hamilton Prop Co. Ltd. whilst CBRE acted for Lloyds Banking Group. Drum’s legal advisors were Morton Fraser and MacRoberts, Pinset Masons represented Lloyds Banking Group and Brodies acted for Hamilton Prop Co. Ltd.
