THE owners of an upmarket shopping arcade next to Harvey Nichols are planning to open a fast food outlet.
Coal Pension Properties, the firm which created Multrees Walk, is seeking permission for a change of use for the empty retail space near the city's bus station.
It is one of several units that have been lying empty since the creation of the thoroughfare, which was completed in 2002.
But news of the surprise planning application has emerged just weeks after the Evening News revealed Multrees Walk had been hit by a wave of closures.
The unit, on Elder Street, is one of nine lying empty on Multrees Walk, which is currently home to stores such as Calvin Klein, Vidal Sassoon, G Star, Daks, Armani and Mulberry.
It had been hoped its location outside one of the two main entrances to the St James Centre would have heightened its appeal to retailers.
But with one in three of the units still lying empty insiders say Coal Pension Properties has been forced to look at other options.
It is understood building work on the planned overhaul of the St James Centre has also been a factor in the decision to seek a change of use for the site.
The owners today insisted they were hoping to attract an upmarket cafe or sandwich bar operator to the site, although they said it was still possible it would be a shop even if planning permission for a change of use is secured.
However it is not expected to be an upmarket cafe-bar like the one in Harvey Nichols or the one operated by the owners of the Valvona and Crolla on Multrees Walk itself, as it will be an unlicensed premises.
One city property source said: "There's absolutely no doubt the priority for this particular site was retail. That was always the plan and there's no question a high-quality retailer would have been in there had they come in with a good offer.
"There are plenty of cafes and places for a sandwich in the St James Centre, which is right opposite this site and there's no need for any more competition.
"However the longer these sites are lying empty, the more questions will be asked over what to do with them."
Another retail industry insider said: "The last thing the owners of Multrees Walk would have wanted to do was open a sandwich bar or any other kind of fast food outlet.
"It'll be a major embarrassment for them to go down that road when this was supposed to be an upmarket retail development."
Multrees Week was recently hit by the departure of Oriental furniture store Soto, luxury bag store Baggatt, and Proudfoot, which specialised in leather coats and jackets, after they struggled to attract enough customers.
The three units are now empty, along with four that have been unoccupied since the arcade opened in 2002.
Steve Spray, of Lasalle Investment Management, agent for Multrees Walk, said: "We're quite a long way off from doing anything with this particular unit.
"You need consent for a fast food outlet no matter if you're opening a coffee bar or a sandwich shop, that's the kind of thing we may be looking at in future."
Ewan Aitken, city council leader, said: "I am a bit surprised, rather than disappointed, that it has taken so long to let out the units on Multrees Walk.
"However rather than just fill it up with shops, it is important to get the right people in there and the right mix of tenants."
Graham Bell, spokesman for Edinburgh Chamber of Commerce, said: "If you actually look at the location of this unit, there's only one other cafe nearby where you can sit down and have a sandwich and a coffee. I don't think this is anything to be ashamed of."