PropLens · 2-3 Bristo Place, Edinburgh, EH1 1EY

Offer range · Operational reposition

Offers Over £985,000

Asking

Step down −£280,000 · −28% to reach 15% cash-on-cash

£705,000

TargetUpper end · 15% c-on-c hurdle

vs asking

−28%

Step down −£50,000 · −7% to reach 20% cash-on-cash floor

£655,000

Lower end · 20% c-on-c floor

vs asking

−34%

Range £655,000 – £705,000 Bid band · Standard a normal negotiating gap

At asking £985,000 the net initial yield on contracted rent alone is 6.6%. Adding stabilised income from the vacant upper floors raises this to 9.2%, but only after the refurb spend and lease-up risk.

Stabilised income

£90,597/ yr NOI

£96,108 ERV − £5,511 op. costs → NOI

Income basis: passing rent £65,000 (G+B, FRI to 2040) plus ERV £31,108 on the 3,003 sqft vacant upper floors, less landlord-paid insurance and management on the vacant portion.

Cost to stabilise

£188,000one-off refurb

£50/sqft standard refurb × 3,003 sqft vacant upper (Fair); listed building +25%

Funded with the purchase — already in equity required on the explorer.

Offer explorer

Your offer

£705,000

Equity required

£0

Lender lends £722,000 against VP £1,110,000

Cash-on-cash

DSCR @ 8%

1.57×

Same at any price

Net cash flow

£32,837

NOI − debt service (fixed)

Lender lens · five ratios

DSCR @ 8% rate 1.57× Viable

Stress DSCR @ 10% rate 1.25× Viable

Debt Yield (NOI / Loan) 12.5% Strong

Yield on Cost 0% Viable

Net Initial Yield 0% Viable

65% LTV · 8% IO · 7% costs · NOI £90,597 · VP £1,110,000 (lender basis) · Refurb-to-let £188,000 (£50/sqft standard refurb × 3,003 sqft vacant upper (Fair); listed building +25%)

Thesis

Part-income-producing freehold in Edinburgh's Newington/Old Town district. Ground and basement (3,610 sqft) leased to 3BPL LTD on a 15-year FRI lease to July 2040 at £65,000 pa with annual RPI uplifts, operating as a restaurant and bar. First floor and mezzanine (3,003 sqft) are vacant, formerly a church and most recently used as an event venue. The asking £985,000 reflects 9.0% on the contracted rent alone, before any value is realised from the vacant upper floors. The investment thesis turns on what the upper floors become: a single-tenant event/leisure relet (the immediate path), a managed multi-let workspace (operational reposition), or change of use to residential or hospitality (subject to planning and listed building consent). The dominant lease provides debt-service coverage from day one; the vacant 3,003 sqft is the upside, and also the work.

What's wrong with it

3,003 sqft of upper-floor vacancy with a specialist former-church layout (mezzanine gallery, theatre stage). Re-letting requires either an event/leisure occupier or a meaningful reconfiguration.
The building is almost certainly listed (former church, Old Town, traditional stone construction). Any change of use, structural alteration or external work needs Listed Building Consent and adds 25%+ to refurb cost.
Tenant covenant on G+B is a private company (3BPL LTD), not a national operator. Strong location supports re-letting risk, but the income is not institutional-grade.

What's right with it

Newington/Bristo Place is one of Edinburgh's strongest footfall corridors: opposite Hotel du Vin, adjacent to the University of Edinburgh, in front of the main bus route from Princes Street south. Activity score 100/100 on the surrounding 500m.
15-year FRI lease with annual RPI uplifts and no breaks. £65,000 pa contracted income covers debt service comfortably at any reasonable acquisition price.
Late premises licence, commercial kitchen, 200-amp 3-phase electricity, and a communal rear garden. The infrastructure for a hospitality or event operator is in place.

Risks

Specialist upper-floor layout (former church, mezzanine, stage) narrows the tenant pool for the vacant 3,003 sqft. Standard office or retail occupiers will need significant reconfiguration.
Listed building status (presumed; to confirm) constrains alteration scope and pushes any conversion budget materially above generic £/sqft rates.
RPI-only rent reviews on the G+B lease provide inflation matching but no market-rent reset until 2040; if the location accelerates, the landlord cannot capture it through the existing lease.

DD gaps

Listed building status (Category A/B/C) — confirm via Historic Environment Scotland. Determines refurb premium and works scope on any reposition strategy.
EPC rating — "available upon request" in the brochure. Below E will block residential conversion routes and trigger MEES upgrades.
3BPL LTD financial accounts and trading history — covenant strength and operator's ability to service rent through future RPI uplifts.

Considerations

VAT elected on the sale; £197k VAT layered on top unless buyer is VAT-registered and elects on completion. Cashflow consideration, not deal-breaker.
Listed building consent regime in Edinburgh Old Town is one of the most rigorous in Scotland. Conservation officer iteration cycles add 3-6 months to any change-of-use timeline.
Upper-floor empty rates are presumed exempt if listed (100% relief). If unlisted, the £14,200 RV would attract approximately £590 of empty rates per month after the 3-month exemption.

SSAS / SIPP variant — 50% LTV At 50% LTV (SSAS/SIPP conservative borrowing), the range tightens to £560,000 – £630,000. The G+B FRI lease (15yr, RPI uplifts) is a strong pension asset; the upper floors are less SSAS-appropriate if a conversion involves works contracts or operator risk inside the scheme.

Quick facts

Asking: Offers Over £985,000
NIA: 6,614 sqft
£/sqft asking: £149/sqft
Tenure: Freehold
Condition: Fair
RV (total): £62,200
Lease: G+B let, 15yr FRI to 2040
Portal: LoopNet
Agents: Shepherd Commercial

Headline numbers

Range: £655,000 – £705,000
Discount: −28% to upper
NOI (stab.): £90,597
Refurb: £188,000
All-in @ upper: £942,350
DSCR @ 8%: 1.57×
T&R value: £1,110,000
Rack rent value: £1,130,000

Property & Valuation

Facts, condition, comparables, valuation stack, and purchase-cost schedule for due-diligence reference.

Facts

Address	2-3 Bristo Place, Edinburgh, EH1 1EY
Asking	Offers Over £985,000 (freehold)
Property type	Mixed retail / leisure / event space
NIA total	6,614 sqft (614.39 sqm)
Basement	1,697 sqft (let — commercial kitchen, cellar, staff)
Ground floor	1,913 sqft (let — restaurant + bar, ~100 covers)
First floor	1,704 sqft (vacant — former church / event space)
Mezzanine	1,299 sqft (vacant — balcony / gallery)
Lease (G+B)	3BPL LTD · 15yr FRI · 31 July 2025 – 30 July 2040 · £65,000 pa · annual RPI uplifts · no breaks
Vacant portion	First floor + mezzanine (3,003 sqft)
RV	G+B £48,000 · 1st+Mezz £14,200 · Total £62,200
VAT	Elected for VAT — 20% additional on purchase price unless buyer elects on completion
Tenure	Freehold
EPC	Available upon request (not stated)
Listed status	Presumed listed (former church, Old Town Edinburgh, traditional stone). To confirm via HES.
Heating / power	Gas central heating · 200 amp 3-phase electricity · late premises licence
Agents	Emily Anderson, Hannah Barnett — Shepherd Commercial
Portal	LoopNet

Photos

Physical assessment

Exterior: 4-storey-plus-basement traditional stone-built tenement, pitched slate roof, ornate stone-arched windows reflecting former church use. Frontage prominently positioned on Bristo Place.
Ground floor: Active restaurant/bar fit-out (visible signage for "SUPERHERO" trading), wood floor, exposed brick, ~100 covers. Disabled WC to rear.
Basement: Compliant commercial kitchen with walk-in freezer, baking area, cellar, staff room, office, customer WCs.
First floor: Former church nave with stage, mezzanine balcony, organ pipes and stained-glass remnants. Recently used as event space.
Mezzanine: Gallery seating, storage. Walk-up access only.
Services: Gas central heating throughout, 200 amp 3-phase electricity, late premises licence.
External: Communal garden to rear, accessible from Lothian Street or via basement.
Surroundings: Opposite Hotel du Vin, adjacent National Museum of Scotland, University of Edinburgh, George Heriot's School. Bus corridor, high footfall 7 days/week.
Layout efficiency: G+B is conventional restaurant; upper floors are a specialist former-church layout with limited reconfigurability without LBC.
Visible issues from photos: Some signs of fit-out wear in upper floor event space; main fabric appears sound.

Per-unit income

Unit	NIA (sqft)	Status	Rent / ERV	£/sqft
Ground + Basement	3,610	Let to 3BPL LTD (FRI 2025-2040, RPI uplifts)	£65,000 pa (passing)	£18.00
First floor	1,704	Vacant — former church / event space	£17,652 (ERV imputed)	£10.36
Mezzanine	1,299	Vacant — gallery / storage	£13,452 (ERV imputed)	£10.36
Total stabilised gross rent	6,613		£96,104	£14.53
Less: landlord insurance			(£2,400)
Less: management on vacant (10%)			(£3,110)
NOI (stabilised)			£90,597

Upper-floor ERV computed as 1,500-4,000 sqft Edinburgh office median (£17.41/sqft, Edozo) × Fair condition 0.85 × upper-floor carve-out 0.70 = £10.36/sqft. G+B ERV cross-checks at £18/sqft, matching the passing rent.

Yield selection

Selected ARY: 8.5%

Edinburgh good city-centre secondary retail / leisure, midpoint 8-10% per PropLens yield-selection tables. Newington/Old Town is a strong city-centre location (uni district, high footfall) but the stock is older mixed-use with a specialist upper-floor layout. The G+B FRI lease (15yr, RPI uplifts) is institutional-grade for the let portion; the vacant 3,003 sqft drags blended yield wider. No sub-£500k lot-size premium (asking is £985k).

Term yield = ARY − 75bps = 7.75%. Reversion yield = ARY = 8.5%.

ARY scenario	Rack-rent value	vs selected
8.0%	£1,201,100	+6.3%
8.5% (selected)	£1,130,447	base
9.0%	£1,067,644	−5.6%

Valuation stack

Basis	Value	Notes
Asking (Offers Over)	£985,000	Vendor's headline. Above all methodology valuations.
Rack rent (gross)	£1,130,000	ERV £96,088 ÷ 8.5%. Ceiling — fully let, no deductions.
T&R (lender basis)	£1,110,000	Term: £65k × YP 8.56 @ 7.75% = £556,664. Reversion on G+B (deferred 14.6yrs) = £232,320. Vacant upper at ERV/ARY net of voids = £322,558.
VP (MV3)	£1,005,000	Hypothetical if both portions vacant. Gross £1,130,447 less voids/rent-free/reletting/holding.
Restricted marketing 180-day	£1000000	T&R × 0.90 — realistic 6-month exit.
Restricted marketing 90-day	£890000	T&R × 0.80 — compressed lender stress-test.

Asking £985,000 sits 21% above rack rent and 47% above T&R. The market needs to credit the value of the future RPI uplift cashflow and the development potential of the upper floors above the methodology valuation to support the headline price.

Acquisition benchmark

Edinburgh city-centre retail / leisure (secondary, mixed-use with vacant upper floors): £/sqft asking £149.

For context, the conversion-cost benchmark notes Edinburgh secondary commercial typically transacts at £100-200/sqft. £149/sqft sits within range for a partly-let asset with a strong lease in place. The same asset fully vacant would price around £80-110/sqft.

Purchase costs

Item	@ Lower (£655,000)	@ Upper (£705,000)	@ Asking (£985,000)
LBTT (Scotland non-res)	£21,250	£23,750	£37,750
Legal fees	£4,500	£4,500	£4,500
Disbursements	£650	£650	£650
Broker fee (1%)	£6,550	£7,050	£9,850
Lender arrangement (2% of 65% loan)	£8,515	£9,165	£12,805
Lender legal	£2,500	£2,500	£2,500
Surveys / DD	£2,000	£2,000	£2,000
Total purchase costs	£45,965	£49,615	£70,055
Refurb to let (3,003 sqft × £50 × 1.25 listed)	£188,000	£188,000	£188,000
Empty rates (listed: presumed exempt)	£0	£0	£0
All-in cost	£888,965	£942,615	£1,243,055

VAT (20%) applies to the sale separately — buyer must register and elect to recover. Excluded from the all-in cost line as a cashflow rather than economic cost.

Strategy & Appraisal

Value-add angles, holding-structure recommendation, and supporting analyses for the bid thesis.

Value-add angles

Re-let upper floors as event / leisure venue Strong

Marketed as-is to a single tenant for events, performance, weddings, conferences. Layout (stage, mezzanine, late licence) is already in place. Refurb scope minimal — cosmetic refresh and M&E compliance.

Refurb: £75,000-100,000 (cosmetic, £25-30/sqft on 3,003 sqft + listed premium). ERV: £30,000-40,000 pa (£10-13/sqft). Key risk: event-space demand in Edinburgh is festival-dominated; year-round letting requires operator with year-round programming.

Operational reposition to managed multi-let workspace Moderate

Subdivide upper floors into 10-15 office/studio rooms with shared facilities. Edinburgh city-centre multi-let licence rates support £25-35/sqft fully let. Stabilised income ~£75,000-90,000 from upper floors alone.

Refurb: £185,000-225,000 (Cellular £55-65/sqft × 3,003 sqft + listed +25%). ERV: £75,000-90,000 pa stabilised. Key risk: listed building consent for fire compartmentation and sub-division of the former church space is non-trivial. 12-18 month planning timeline.

Change of use — residential conversion of upper floors Moderate

Convert first floor + mezzanine to 4-6 student flats (Edinburgh PBSA-adjacent, high demand). Resi GDV £400-600/sqft × 3,003 sqft net = £1.2-1.8m gross. But listed building consent and structural alterations on a former church add significant complexity and cost.

Refurb: £450,000-550,000 (commercial-to-resi £125/sqft × 3,003 + listed Cat A/B premium +40-60%). GDV: £1.2m-1.8m before separation costs. Key risk: planning and LBC. Old Town conservation officer iteration cycles; HMO licensing if student-let; structural sub-division of nave is contested.

Boutique hotel / aparthotel conversion Moderate

Adjacent to Hotel du Vin and the festival circuit. Convert upper floors to 8-12 hotel rooms / serviced apartments. Edinburgh ADR £150-220 supports strong revenue at scale. Requires planning, hotel licensing, lift installation.

Refurb: £600,000-800,000 (full hospitality fit-out, lift, fire, M&E). GDV (PropCo MV1): £1.5-2.5m on stabilised RevPAR. Key risk: capex magnitude and operator risk; profits-method valuation depends on trading evidence.

Hold-as-is, accept G+B income only Weak

Buy at a level that pencils on the £65k contracted rent alone, treating the upper floors as zero-value optionality. At asking £985k this implies 6.6% on passing rent.

Refurb: £0 day-one. Income: £65,000 pa (passing) less £2,400 insurance = £62,600 NOI. Key risk: empty rates on upper floors if listed status not confirmed; ongoing vacant-property insurance and maintenance burden on 3,003 sqft of unused stone-built former church.

Title split, sell upper floors to specialist developer Weak

Carve a long leasehold on the upper floors and sell to a hotel or residential developer, retaining ground/basement as long-income freehold.

Refurb: Buyer's cost. Receipt: £200,000-400,000 (residual value of upper floors with vacant possession, pre-development). Key risk: few buyers for a specialist former-church upper-floor leasehold with LBC overhead. Limited liquidity.

Holding structure

Pension (SSAS or SIPP) plus PropCo. The G+B element is SSAS-eligible commercial (retail / leisure use class), and the 15-year FRI lease with RPI uplifts is well-suited to long-term tax-free hold inside a pension. The vacant upper floors and any conversion / reposition activity (multi-let, hospitality, resi) sit better in a trading SPV outside the pension to keep operator risk and works contracts separate from the pension fabric.

Sources

LoopNet listing — 2-3 Bristo Place
Shepherd Commercial brochure (September 2025)
Ryden 90th Scottish Property Review 2025
Edozo conventional rates (Edinburgh, March 2026)
City of Edinburgh planning portal
Historic Environment Scotland — listed building register

Jurisdiction

Scotland