Budget hotel for prime Princes Street site

The top floors of the site housing the fashion outlet Topshop, a Grade II listed building that was once home to R W Forsyth's department store, are to be converted into 96-room hotel which will be opened next summer.

The hotel is part of a deal with Arcadia Group, the UK's largest privately-owned clothing retailer, which owns the Topshop building. The budget hotel group has agreed a 35-year lease, which represents a 10 million investment.

The Travelodge will be one of two being built in Edinburgh - the other is in Queen Street, and they will bring the number of hotels the chain owns in the capital to 13.

The upper floors of the Princes Street building have been lying empty for years.

Travelodge chief executive Guy Parsons said the hotel would fill four floors above the Topshop store. "We will be utilising space that was previously used for offices and storage," he said.

"Given the lack of new development sites in central Edinburgh, this really is one of the most prominent sites left in the city, and we are delighted to have secured it."

The two Edinburgh addresses are among 22 new hotels being opened by Travelodge across the UK this year, including one at Glasgow Airport, with a combined investment value of 165m.

The announcement comes just four years after Arcadia unsuccessfully tried to sell the Princes Street building a year after it bought it for 26m.

Graham Bell of the Edinburgh Chamber of Commerce said that the announcement was a positive move.

"They are utilising upper floors of premises that don't have use, which is all adding to the value of Princes Street," he said. "Also the fact that it's a hotel that's being opened, creating a mixture of what's going on in Princes Street - just as the chamber believes should be happening, which is a blend of retail, eating houses and quality hotels.

"I don't think there's is any snobbish regard as to how much they're charging with regards to Princes Street. If they are alongside other quality establishments, that can only be a good thing."

Mr Bell added that the arrival of the hotel was a sign that the regeneration of the shopping street was in place and would accelerate with the completion of the troubled tram project.

"Princes Street has been gathering itself for its regeneration for some time now, and gradually things are happening for the good. (The Travelodge announcement] it is part of that process.

"You can bet your bottom dollar that the moment the trams are finished, property prices along the route will be shooting through the roof, so it's a good time to be investing."

Building is a historic survivor

THE Grade II listed property that will house the new Travelodge is an iconic landmark of Princes Street and one of the buildings surviving from its heyday as a shopping destination.

Built between 1906 and 1907 as R W Forsyth's flagship department store, it was the first fully steel-framed building in Scotland, and showed a very early use of glazed brick.

Described by Historic Scotland as being "free-style Renaissance", it is said to have a "surprisingly intact" interior despite its conversion for modern retailing.

Forsyth's closed in the 1981, and the building was sold to the Burton Group. The only remaining trace of the store's previous incarnation is a small, discreet sign carved into the stonework.