A prime property in the affluent city of Edinburgh, housing both Waitrose and Kwik-Fit branches in Morningside, has been sold in a deal that surpassed the initial asking price of £18.15 million.
The branches, located at 145 Morningside Road and 7 to 13 Falcon Road, are considered to be among the strongest trading locations for both brands, according to property consultancy Knight Frank.
The purchaser, a client of DTZ Investors, was represented by Knight Frank in the transaction, while the property was sold by a client of LaSalle, with representation from Savills.
Waitrose occupies 33,347 sq ft of retail space in the property, while Kwik-Fit leases the adjoining 12,795 sq ft garage, making it a valuable investment opportunity.
Euan Kelly, a capital markets partner at Knight Frank in Edinburgh, highlighted the exceptional performance of both Waitrose and Kwik-Fit at their Morningside locations. He mentioned the lack of nearby competition and the presence of an affluent local population as contributing factors to their success. Supermarkets, in general, are performing well, with a long-term average growth rate of 4.1% in grocery sales, driving strong demand from investors for such assets.
Ewan Stewart, acquisitions manager at DTZ Investors, expressed delight in completing the acquisition, citing the strong trading performance of tenants in an affluent neighborhood in central Edinburgh as a key factor in their investment strategy. The long leases to these tenants align with their investment criteria, and they look forward to pursuing similar opportunities in the future.
In the broader context, Knight Frank noted that the Scottish commercial property investment market has stabilized in recent months, with solid investment figures in the third quarter reaching £1.21 billion for the year. The retail sector, in particular, was the most active, accounting for £446 million of deals. The political stability post-election and the first cut to interest rates have contributed to a more stable investment environment.
Looking ahead, the outlook for the Scottish commercial property market seems positive, with expectations of a busy first half of 2025, provided that the macro environment remains stable and interest rates continue along their current trajectory. Investors are showing interest in assets with strong fundamentals, such as the Waitrose and Kwik-Fit property in Morningside, indicating a healthy appetite for quality commercial real estate opportunities in Scotland.