Tiger Developments, the Irish property firm, wants to secure office occupiers on “pre-let” deals before pressing ahead with building work on its four-acre Haymarket site.
The future of the £250 million development, which was to include a 245-bedroom hotel, offices, retail units and a mini supermarket, is further complicated by any work needing to get the approval of Ireland’s “bad bank”, the National Asset Management Agency (NAMA).
It also emerged today that a deal with budget hotel chain Travelodge for it to occupy the hotel element of the scheme had expired.
News of the delay is the latest blow to hopes of the regeneration of the former goods yard site in Morrison Street, after original plans were thrown out in 2009 because of concerns about the impact of a proposed 17-storey hotel.
Revised plans, including a smaller main building standing at 35 metres, won planning consent last December.
Some preparatory work will take place but it is understood that no buildings will be created until office occupiers sign up.
Graham Birse, managing director of the Edinburgh Chamber of Commerce, said: “The inquiry process is such that a perfectly legitimate project on a site that has lain derelict and bare for nearly 20 years has not gone ahead.”
The site was purchased by Tiger in 2006 for £40m through a loan provided by Irish Nationwide. That loan has now been transferred to NAMA.
It is also understood that Travelodge is now trying to renegotiate the price it will have to pay.
Stewart Taylor, a director at property firm CB Richard Ellis, said: “An occupier that would consider a pre-let three or four years away will want to know they are committing to something that will be there when their lease expires a few years down the line.”
A spokesman for Tiger said: “We have spent a year marketing the site and it has gone down positively across retailers, hoteliers and office occupiers.”