The Edinburgh-based property investment holding and development company had planned to sell St Margaret’s House at 151 London Road to Drum for £15m, with the developer submitting plans for 377 student bedrooms and 107 residential flats to the City of Edinburgh Council planning committee in September 2019.

However, a condition on the purchase included Drum entering into a pre-let agreement with a specific, but unnamed, third-party tenant for the student accommodation and Caledonian Trust has admitted that the pre-letting “has not yet occurred” adding “there is now material uncertainty on the prospective tenant pursuing its interest in the location”.

As a consequence, the price has now reduced to £11.5m in order for Drum to proceed with the purchase but, should a pre-let by agreed, it will increase again to £15m.

The sale, which remains conditional on planning permission being secured, is expected to be completed next summer.

Situated adjacent to Meadowbank Stadium, the 92,000 sq ft multi-storey St Margaret’s House is Caledonian Trust’s largest property development. A book value of £11m was attributed to the property as at 30 June 2019 in the last audited accounts published by Caledonian Trust. For the year ended 30 June 2019, the property generated gross rental income of £194,395 for the company and an operating profit of £167,020.