Princes Street fire: Developer behind hotel project at former Debenhams store 'could quit site'
‘It will likely be a gap site for sometime to come’ - property insider
The developers behind the hotel project at the former Debenhams store on Princes Street could decide to quit the site following the fire which ripped through the building, with property insiders suggesting it could remain a gap site for “some time to come”.
Criterion Capital, which is headed by billionaire investor Asif Aziz, planned to turn the former store into a Zedwell hotel and pod-hotel, with 328 bedrooms plus 345 “capsules” or pods, and shops on the ground floor.
The blaze in the early hours of Thursday caused extensive damage and structural engineers have said the top two storeys must be removed for safety reasons.
A property insider said a new development proposal would have to be prepared and a fresh planning application submitted.
And they added: "There is no guarantee that Criterion will want to progress it themselves and may sell on when the site is cleared and stabilised.
"There will be insurance and legal work needed before anything happens, so it will likely be a gap site for sometime to come, unfortunately."
Another source echoed the speculation that Criterion could decide to sell the site. "They will have designed their plans around what were the existing internal structures in the building, including a listed staircase and an ornate library which I guess have gone.
"So they would need look at completely revising the proposals for the site and putting in a new planning application.
"They might take the view that if someone else comes in, they could make more money by selling it and letting someone else pursue a planning application."
But the source added that the economics of the site would have improved as a result of the fire because there would now be fewer restrictions on what a developer is allowed to do.
The source said a change of proposal and a new planning application would inevitably mean a delay, potentially of years. But they said it would not necessarily cause any further damage to Princes Street, which has seen so many shops close and now has several building projects under way.
"There are so many sites under construction on Princes Street that the street's future is secure, but it does look like a building site and that will be the case for sometime yet. So a delay on this site won’t make that much difference in the short term. But it means it will take longer to finish Princes Street.”
Debenhams closed in 2021 and the building was originally due to be converted into a 210-bedroom luxury hotel with a rooftop bar/restaurant, and cafe and wine bar on the lower levels, along with an urban spa and wellness centre.
But that plan fell through in September 2023 and owners Legal & General put the property up for sale. It was bought by Criterion, who secured planning permission for their hotel and pod-hotel project in February this year. It was due to be the first Zedwell hotel in Scotland.
Criterion Capital has been approached for comment.