Sir Stelios' no-frills chain eyes empty building for empire

Published on Monday 11 August 2008 10:53

WITH little room for anything more than a single bed and with a cleaner that you need to pay for at reception, it is a far cry from some of Edinburgh's renowned hotels.

Yet the company behind budget airline easyJet believe there's space in the city's hotel market for their no-frills hotel offering.

It is understood the firm has set its sights on a former insurance firm HQ on St Andrew Square for its first Scottish operation.

The easyHotel chain – part of Sir Stelios Haj-Ionnou's easyGroup empire – has its eye on the former head office of Scottish Life.

The company currently has four hotels in the south of England but is planning a major expansion, with franchises across the UK.

A spokeswoman for easyHotel was not willing to be drawn on specific sites in the city, but said:

"We're looking at key locations and Edinburgh is a major city, so we are very keen."

Scottish Life put its eight storey 19 St Andrew Square head office on the market for 5 million in May after it chose to relocate its 1200 staff to other offices in the Capital.

Selling agent DTZ has said that the site, in the heart of Edinburgh's traditional financial hub, would also suit hotel developers.

Commercial property experts say that more traditional office units are becoming attractive to hotel developers in the changing economic climate.

Stewart Taylor, director of the business space consultancy at CB Richard Ellis, said: "You can see why it would be attractive to hotel operators.

"The difficulty that office developers are having is securing finance, which has made it slightly easier for hotel developers, who have cash resources and can compete better with the office market."

The site is close to the former Royal Bank of Scotland headquarters that Hearts supremo Vladimir Romanov bought for 20 million in May 2007 and wants to turn into a top-class hotel.

Simon Williams, chief executive of the Edinburgh Principal Hotels Association, said:

"Edinburgh is still a strong destination and people will be able to find the price they want to pay."

A spokeswoman for selling agent DTZ said: "The closing date has passed and a number of offers were received but no deal has been concluded yet."