The Edinburgh-based property investor had agreed to sell the St Margaret’s House site next to Meadowbank Stadium on London Road for £15 million to Drum to build a property with 377 bedrooms and 107 residential flats.
But the deal was conditional on a pre-let to an unnamed tenant and Caledonian said there was now “material uncertainty on the prospective tenant pursuing its interest”.
The price has now been dropped to £11.5 million on the condition that it will be raised again to £15 million if a pre-let is agreed. The deal remains conditional on planning permission being secured.
Caledonian earned £194,395 in rent on the existing 92,000 sq ft St Margaret’s House, which is values at £11 million, for the 12 months to 30 June 2019.