Drum to Lead £200million transformation of Lloyds Banking Group HQ
Landmark Port Hamilton building redesign to become one of Capital’s largest ever pre-letting deals
Lloyds Banking Group has announced plans to transform its Port Hamilton building in Edinburgh city centre into a state-of-the-art innovation hub as part of a £200 million redesign led by Drum Property Group.
In what will be one of Edinburgh’s largest ever pre-letting deals, the complex will become Lloyds Banking Group’s main base in Scotland following completion of the works in 2027.
Lying at the heart of the city’s financial district, the 282,000 sq. ft. Port Hamilton building has been home to Scottish Widows for almost 30 years. It is one of Edinburgh’s landmark office buildings, reaching up to eight storeys with a distinctive curved roof.
In 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.
Welcoming the redevelopment deal, Graeme Bone, Group Managing Director, 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."
As the UK’s largest digital bank, Lloyds Banking Group employs around 10,000 people in Edinburgh across a range of different parts of the company, including customer-facing, finance and technology roles from software engineering and data science to cyber security.
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 full 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, said: “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, noting they were delighted to conclude the agreements to enable this significant redevelopment project.
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, Pinsent Masons represented Lloyds Banking Group and Brodies acted for Hamilton Prop Co. Ltd.
