Hotel plan to breathe new life into old insurance HQ

Published on Thursday 21 May 2009 09:58

A NEW boutique hotel is set to be created within the historic former headquarters of insurance firm Scottish Life.

The building, at 19 St Andrew Square, has been on the market for a year since the company moved staff to owner Royal London's other city offices.

Now it has been placed under offer by an unnamed investor who wants to create a small hotel.

It is expected that the hotel would have about 26 rooms and it is also understood that the top floor, which offers views across the city and out to the Forth, may be used as a restaurant.

It would become the latest in a string of new hotels to be announced in the Capital.

However, there are still fine details that need to be agreed before a deal is formally completed with the buyer.

James Thompson, director of business space at DTZ, which is acting as the selling agent for Scottish Life, said: "We have it under offer and we're working with the purchaser at the moment.

"Their aspirations are in the hotel sector but obviously we have to work this one through because, like any transaction, there are a number of hurdles which we are working our way through.

"It would be a very good use for the building as it is a corner building with great views and a hotel will bring some additional variety in there.

"St Andrew Square is changing beyond all recognition. You have the opening of St Andrew Square Garden, which has been a big success, the tram coming through, the St James Centre development and other developments such as the Stockland Halladale building.

"If all these occur, this will be a nice commercial use to add to the mix in the square, so if we can make it happen it will be a very good thing."

He said that, at 25,000 square feet, it is a "relatively small" building for a hotel, so will be likely to have a small number of rooms.

Even when a sale is completed, it is likely that it would take a lengthy development project before it is turned into a hotel.

The building was until recently linked to the neighbouring office at 1 Thistle Street by a bridge on the third and fourth floors but that has now been taken down.

Stewart Taylor, a director at property firm CB Richard Ellis, said: "At the back end of last year, the hotels market was very busy because they could get buildings for significantly less than previously. But, at the end of the year, the bigger chains started to struggle to get finance. Now it seems to be the smaller boutique guys that are able to act.

"St Andrew Square is a great place for a hotel and it is seen as one of the few real success stories in terms of the council spending money on communal areas."

ON THE MOVE

THE boutique operator would join a growing list of hotel firms planning a move to Edinburgh. The property arm of drinks giant Fraser & Neave is planning a move on to Shrub Place, off Leith Walk, while an unnamed developer has agreed to buy the nearby Shrubhill House.

InterContinental and Travelodge have both agreed to move to the proposed development on the former Morrison Street goods yard at Haymarket, while Premier Inn and easyHotel are planning moves onto Princes Street.