L&G puts site of former Debenhams on Edinburgh's Princes Street for sale after ditching £50m-plus plans to create boutique hotel
Property consultancy JLL is seeking a buyer for the asset, which spans 116,000 square feet over nine floors, and has planning permission to turn it into an upscale hotel of up to 210 bedrooms. The firm also flagged the “highly prominent prime frontage” at the site on the Scottish capital’s “most recognisable” street, adding that it has foot traffic levels of more than 400,000 pedestrians a week.
JLL said the buyer could create a hotel with a rooftop bar/restaurant with “uninterrupted” views over Princes Street Gardens and on to Edinburgh Castle as well as a café and wine bar on the lower levels. The plans also include an urban spa and wellness facility. The property is also expected to achieve a sustainability Breeam rating of “excellent” and the Carbon Reduction Gold Standard according to Scottish technical standards.
Kerr Young, head of UK national hotel transactions at JLL, said: “Edinburgh is the UK’s best-performing hotel market, and one of the most sought-after in Europe, having enjoyed sustained growth in average room rates and revenue per available room over recent years.
“109 Princes Street provides an outstanding hotel-development opportunity. We have worked with our clients over recent years to optimise the design and density of the proposed scheme, and we anticipate an exceptional level of interest from a variety of owner-operators, developers and investors from across the globe.”
Legal & General in 2020 announced, on behalf of the L&G UK Property Fund, that it was to plough more than £50m into the “major” regeneration project to turn the three separate listed properties 109-112 Princes Street into a hotel and city-centre “hub” including shopping, dining, hospitality, leisure, and event spaces.
The following year it said it had got planning permission from Edinburgh City Council for the proposals, which it said were described as “setting the tone” for the future regeneration of the city centre. Legal & General added that the plans would include a 207-room upscale boutique Tribute Portfolio Hotel as well as the likes of a pedestrian link between Princes Street and Rose Street, with construction work expected to begin in 2022 and the hotel scheduled to open in 2024. Furthermore, it noted that the original properties were built in 1869 and the department store was developed in 1978.
Roddy Smith, chief executive of Essential Edinburgh, said in 2021: “We need new investment to give people new reasons to visit the city centre, and to ensure that buildings do not lie empty for long. Legal & General is to be congratulated for bringing forward high-quality proposals at just the right time to make a real difference to both Princes Street and Edinburgh.”
A report published in May of this year found that Edinburgh had maintained the UK’s top spot for hotel-development. Marc Finney, head of hotels and resorts consulting at property firm Colliers, said: “Edinburgh has stayed in the top spot of our ranking thanks to its appeal as a popular leisure destination and secure underlying market fundamentals for investors.