The Port Hamilton building on Morrison Street will undergo a £200 million redesign in partnership with Drum Property Group, to become the group’s main base in Scotland.

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 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.”

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.

In the heart of the financial district, the Port Hamilton building has been home to Scottish Widows for almost 30 years and will remain the head office for the pensions and investments business after the transformation works are expected to be completed in 2027.

The 325,000-square-foot complex reaches up to eight storeys and with its distinctive curved roof is one of Edinburgh’s landmark office buildings.

The redesign 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: “There’s a real buzz in the fintech scene in Scotland 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, commented: “We’re creating modern, inclusive, sustainable and fun workplaces where our people love to work.

“We’ve already made significant improvements to our offices across the UK, with more to come. And our redesigned home in the centre of Edinburgh will help us connect, collaborate and spark the creativity to deliver great outcomes for our customers.”