2-3 Bristo Place, Edinburgh, EH1 1EY
Asking £985,000 sits significantly above the upper end (~52% above). The deal does not pencil at asking under conventional finance, even with the income portion let on a fresh 15-year FRI.
Range upper end (£650,000) is 52% below asking. Closing the gap requires either a materially stronger upper-floor revenue case (managed-workspace, hospitality, or hotel use) or a substantially lower acquisition price.
Income portion: ground floor and basement (let)
Lender basis: T&R £745,000 · Loan £484,250 · Debt service @8% £38,740
| Ratio | At £575,000 | At £615,000 |
|---|---|---|
| DSCR @ 8% | 1.68× Viable | |
| Stress DSCR @ 10% | 1.34× Viable | |
| Debt Yield | 13.4% Strong | |
| Yield on Cost | 10.6% Viable | 9.9% Viable |
| Net Initial Yield | 11.3% Viable | 10.6% Viable |
Development portion: first floor and mezzanine (vacant, hold-intent)
Stabilised NOI £35,600 on stabilised value £355,000 · Loan £230,750 · Build cost £307,500
| Ratio | At £10,000 | At £35,000 |
|---|---|---|
| DSCR @ 8% | 1.93× Viable | |
| Stress DSCR @ 10% | 1.54× Strong | |
| Debt Yield | 15.4% Strong | |
| Yield on Cost | 11.2% Strong | 10.3% Viable |
| Net Initial Yield | 10.0% Viable | |
2-3 Bristo Place is a four-storey former church on the eastern fringe of Edinburgh's University quarter, opposite the Hotel du Vin and a short walk from the National Museum of Scotland. Ground floor and basement (3,610 sqft NIA, kitted out as a 100-cover restaurant with full commercial kitchen) are let to 3BPL LTD on a 15-year FRI lease at £65,000 per annum, started July 2025, with annual RPI uplifts and no break.
The first floor and mezzanine (3,003 sqft NIA) retain the former-church configuration: a stage, balcony, vaulted ceiling, and original ecclesiastical detailing. They are vacant. The asking price reflects, in part, a presumed redevelopment value on this upper part. Anchored on a conventional refurb-and-let to commercial multi-let or office use, the upper floors yield a stabilised value of around £355,000 with a build cost of around £307,500: the residual is thin.
The income portion alone supports £575,000–£615,000 on conventional 65% LTV at 8%, hurdle band 20% / 15% cash-on-cash. Adding the upper-floor residual brings the hybrid range to £585,000–£650,000. Asking sits 52% above this band. The gap closes only if upper-floor revenue is materially higher than a conventional commercial let (boutique hotel, aparthotel, large managed-workspace), or if the refurb spec is leaner than £75/sqft.
- Half the building is vacant in a former-church configuration with stage, gallery and vaulted ceilings: removing those features incurs listed-building consent risk; retaining them constrains the user pool.
- The income tenant 3BPL LTD is a small Ltd Co that took occupation only nine months ago: covenant strength is unproven and no trading record yet supports the rent.
- Conventional refurb-and-let on the upper floors generates a stabilised yield of 10.0% against build-and-acquisition cost: the deal needs a higher-revenue use case to clear the asking price.
- The Bristo Place pitch is genuinely good: opposite the Hotel du Vin, on a main route between Princes Street and Newington, with seven-day-a-week footfall driven by the University of Edinburgh's main campus.
- The ground-floor lease is on a 15-year FRI with annual RPI uplifts and no break, contracted to July 2040: the income portion is conventionally bankable and rises with inflation.
- The upper floors carry late premises licence, gas central heating throughout, and 200 AMP 3-phase electricity: meaningful M&E already in place for hospitality, events or workspace use, reducing refurb scope vs a stripped shell.
- Listed building consent risk if the upper-floor configuration is materially altered (former church features likely contribute to listing rationale).
- Tenant covenant on the income portion is a small Ltd Co with no trading history beyond nine months: lender appetite for the T&R basis may discount accordingly.
- Refurb-cost overrun on upper floors: stripping out fitted church-era stage, gallery and ecclesiastical detail to neutral commercial spec carries demolition and consent unknowns.
- EPC certificate (available on request per brochure): required to size MEES retrofit obligation pre-let on the upper floors.
- Listed-building category and full schedule of features protected: governs scope of permitted alteration to first floor and mezzanine.
- 3BPL LTD covenant: directors, accounts, rent deposit, personal guarantees, sales record since lease commencement.
- VAT-elected: an opted property carries 20% VAT on the purchase consideration unless TOGC conditions are met by the buyer's structure (TOGC plausible given existing letting on the income portion).
- Asking price is above £500,000: a consideration for SSAS funding capacity and for solo private-investor appetite, neither a disqualifier.
- RV £62,200 (G+B £48,000, 1st+Mezz £14,200): tenant pays rates on the let portion; landlord exposed on the vacant portion until it is let or revaluation appealed within four months of completion.
If purchased through a SSAS pension scheme (LTV constrained to 50% by HMRC rules), the same hybrid calculation produces a range of £515,000 – £575,000. Lower than the leveraged range because less borrowing requires more cash equity. The property qualifies as Class 1A retail / mixed commercial (SSAS-eligible).
