The House of Fraser site at the west end of Princes Street has been put on the market 12 years after the retail giant bought the Jenners store at the other end of the street. The site has had a department store on its since drapers Robert Maule & Son opened in 1894.

The sale has been described as a “unique opportunity” to buy one of the most iconic buildings on Princes Street, which has been home to a Frasers store since 1976.

It could be one of the most attractive sites to come onto the market for a potential hotel since the former Lothian Regional Council building on George IV Bridge was demolished a decade ago.

Frasers department store at the West End. The building is up for sale and may be converted into a hotel. Picture: Greg Macvean.

Agents marketing the Frasers building – which dates back to 1931, when the Binns department store opened – have highlighted the fact that the site was home to the Osborne Hotel in the late 19th century before it suffered fire damage in 1879.

Industry insiders believe House of Fraser may be persuaded to give up a long-term lease on the west end store in the next few years to concentrate on the performance of Jenners. They said the site could be divided up for a number of different uses in future, including restaurant, bar, office and residential.

A lack of investment at the west end store and the opening of the new St James retail development in 2020 has triggered speculation about a major development of the site.

The sales brochure states: “Edinburgh is the most visited tourist and commercial destination in the UK after London, with an exceptional transport and communications network connecting it both internationally and with other cities throughout the UK.

“Edinburgh is one of the UK’s strongest retailing centres, generating an estimated £2.56 billion of in-store expenditure. This is further enhanced by tourist expenditure which is estimated at over £1 billion annually, equating to an average spend of £334 per visitor.”

Philip Hay, of agents Jackson Criss, said: “There is no definitive strategy from House of Fraser, but on the basis of the fact that it has two stores on Princes Street and the investment in this one hasn’t been huge, you would have to take the view that it wouldn’t be a long-term option for them.”

Roddy Smith, chief executive of business group Essential Edinburgh, said: “Retailers want things laid-out differently now. Stores like this one, and the ones Debenhams and M&S have on Princes Street, are like rabbit warrens.

“All the indicators are that Edinburgh can sustain more top-end hotels. We want the west end to remain vibrant to counteract what is going on in the east end.”

Iconic Frasers' Princes Street store in Edinburgh goes on the market