Edinburgh set to gain another luxury hotel as new brand reveals city centre location

Plans have been laid out for yet another luxury hotel in the centre of Edinburgh – a £50 million, four-star property marking the first in the city for the Dalata-owned Clayton brand.

The move follows the acquisition by Dublin-headquartered Dalata Hotel Group of a development site at 28 St Andrew Square that was formerly home to Virgin Money premises. The proposed 153-room Clayton property, set to create about 60 jobs when operational, will sit alongside the square’s fellow high-end hotels Gleneagles Townhouse and Malmaison.

The Edinburgh Clayton development site in a key business and leisure location was acquired for £12.5 million from Aviva Life & Pensions UK, and paid for out of Dalata’s existing cash and banking facilities.

The site includes a category A listed building that is currently empty and approved for office use, with planning permission granted for an extension to both the rooftop and back of the property. Dalata plans to submit a revised planning application in the first quarter of next year, enabling the construction of an eco-friendly four-star Clayton Hotel expected to be completed by mid-2026. It will complement Dalata’s existing Scottish presence that comprises one Clayton and one Maldron hotel, both in Glasgow.

Dalata has bought a development site in St Andrew Square (pictured) for a property that will sit alongside fellow high-end hotels Gleneagles Townhouse and Malmaison (file image). Picture: Lisa Ferguson.

The group adds that its hotel scheme is designed to work within the new building envelope permitted under the existing planning permission and, subject to a successful revised planning application, the hotel is also set to incorporate a bar, restaurant, dry gym and two large meeting rooms with period features on the first floor overlooking St Andrew Square.

Dalata, which says it is the largest hotel operator in Ireland, with a growing presence in the United Kingdom and continental Europe, adds that the overall investment in the project, including the site purchase, will be about £48m.

“The new hotel, as part of our sustainability strategy, will be one of our first to be designed to operate with zero on-site carbon emissions. As a conversion scheme, it will also have considerably lower embodied carbon than a new build," the hotel group said. Other high-end forthcoming Edinburgh hotels include Marriott’s five-star W hotel, scheduled to open next month, and the Hyatt Centric hotel in Haymarket set to debut in 2025.

Shane Casserly, corporate development director at Dalata, said: “Edinburgh is one of the top-performing hotel markets in Europe and we are delighted to secure a development site in such a prestigious location.”

Dalata has alongside the Edinburgh announcement said it has completed the transaction to enter the hotel market in the Netherlands with the acquisition of the leasehold interest in Hard Rock Hotel Amsterdam American. The 173-room hotel is being rebranded to Clayton Hotel Amsterdam American.

Dermot Crowley, chief executive of Dalata, welcomed the Scottish and Dutch developments, adding: “Edinburgh has long been a target city for us to locate our brands, and we are delighted to have secured such a prestigious building in the centre of the city. This will be our third hotel in Scotland. We will continue to seek out further opportunities in our target markets.”

Meanwhile, Hunter REIM and Ruby Hotels’ plans to demolish the former Next, Zara, and Russell & Bromley stores on Princes Street in the Scottish capital to make way for a new £100m, 300-room hotel have been given the green light.