five years after the completion of Gogarburn – Royal Bank of Scotland’s vast headquarters near Edinburgh and the darling of disgraced former chief Sir Fred Goodwin – and the £350m office complex may already be heading for the block.
RBS is considering the merits of a sale and leaseback of the property to shore up its finances after being bailed out by taxpayers by over £50bn, it emerged yesterday.
The sale is being considered as part of a longer term strategic review of the group’s property portfolio, which is worth around £4bn. Sources close to the bank insisted that the review may not eventually lead to a sale.
Gogarburn, set in 100 acres of parkland on the outskirts of Edinburgh, was officially opened by the Queen in 2005 and houses 3,200 of the bank’s staff. It includes leisure facilities, parking for 900 cars, an executive wing
which housed Goodwin’s former office, and an on-site replica of a High Street, complete with a functioning RBS branch, a Tesco branch, a Starbucks and a hairdressing salon.
The complex was later nicknamed “Fred’s Folly” after the bank’s fortunes nosedived.
Property specialists said a sale would cause a stir in the market, since the property would be considered a relatively secure investment due to the length of any leaseback and RBS’s government backing.
“There is a lot of appetite at the moment for what we call a ‘flight to prime’,” said Chris Macfarlane, the Scottish managing partner of property consultants King Sturge.
“The most likely buyers would probably be institutional investors such as Prudential, Aviva or Standard Life, or alternatively a sovereign wealth fund, rather than a UK-based real estate investment trust (REIT).”