Lloyds Banking Group has announced plans to transform its Port Hamilton building in Edinburgh city centre into a state-of-the-art innovation hub.

In what will be one of Edinburgh's largest ever pre-letting deals, Drum Property Group will lead the £200 million redevelopment of the 282,000 sq. ft. building.

Following the completion of the redevelopment works in 2027, Lloyds Banking Group will enter a 21-year lease, making Port Hamilton its main base in Scotland.

The iconic building, which has served as the home of Scottish Widows for almost 30 years, will undergo a major transformation, retaining its position as a prominent landmark within Edinburgh's financial district.

This innovative deal structure sees Drum Property Group assume control of the property and undertake the redevelopment as part of a forward funding agreement.

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.

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"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.