Property developers behind one of the biggest projects in modern times in Edinburgh have swooped to snap up one of the city’s department stores.
READ MORE: House of Fraser reportedly asks landlords to slash rent bill
Edinburgh-based firm Parabola has purchased the House of Fraser store on Princes Street after a fierce bidding war.
Agents handling the sale of the site – which has had a department store on it since 1894 – said that it had finally gone for a price “significantly in excess” of its £13.7 million price tag.
Parabola has bought up the House of Fraser site months after unveiling plans for a new £500m “urban quarter” on the outskirts of Edinburgh.
The city’s biggest development for well over a decade is earmarked for a swathe of land on both sides of the tram line near the Gyle Shopping Centre.
About 43 acres of undeveloped land to the south of the Edinburgh Park business park would be transformed under the firm’s plans. Parabola is hoping to begin work on site later this year on the west Edinburgh development, which is also expected to include a “civic square”, 150-seat conference and events facility, bar-restaurant, leisure and medical centre and micro-brewery.
When the House of Fraser site, which has been run by the retail giants since 1976, went on the market last October, it was suggested that the site could be converted into a hotel.
Agents marketing the Frasers building highlighted the fact that the site was home to the Osborne Hotel in the late 19th century, before it suffered fire damage in 1879.
The first department store on the site was opened by drapers Robert Maula & Son in 1894. In 1931, the Binns department store opened on the site; the brand was taken over by House of Fraser in 1953.
House of Fraser has a long-term lease on the building, which runs until 2058. However, it emerged earlier this month that the company had asked the landlords of some of its department stores for rent reductions. The retailer, which also runs the historic Jenners department store, had its status downgraded by ratings agency Moody’s before Christmas due to weak trading last year.
Parabola has described its acquisition of the building, at the west end of Princes Street, as a “strategic purchase”.
The firm’s other projects include the Central Square office development in Newcastle and the mixed-use Kings Place project in London, which included a new concert hall, conference centre and waterfront restaurant.
Tony Hordon, managing director of Parabola, said: “We are delighted to have secured this iconic building, which is a strategic purchase and addition to the Parabola investment portfolio. It provides diversification to our other Edinburgh asset, a 43-acre development site at Edinburgh Park, which is subject to a live planning application, to create a European exemplar of a new quarter of the city.
“Our current focus is on securing planning permission for Edinburgh Park’s first new buildings in a decade, which we anticipate in the first quarter of this year, with work beginning on site in the summer to meet the significant opportunities for Edinburgh.”