London firm 'first in line' for Caltongate bid

Property industry sources believe Allied London, developer of the Spinningfields commercial district in Manchester, is to be named preferred bidder for a huge gap site next to the capital's Waverley Station.

The City of Edinburgh Council has revealed it expects Deloitte, the firm handling the assets of the previous Caltongate scheme earmarked for the site, to announce within weeks who has won a long-running bidding war.

The council owns about a quarter of the land that was meant to be part of Caltongate. However, Lloyds Banking Group will also have a say in what firm is selected as it is owed 70 million following the collapse of Caltongate developer Mountgrange, another London firm.

The bank is thought to have vetoed a quick sale of the land previously owned by Mountgrange in the immediate wake of its collapse, fearing it would not get enough of its money back.

Sources say Allied London is one of a host of major property and investment firms in the frame, with others including British Land, Grosvenor Developments, and Elphinstone. A spokesman for Allied London confirmed it had been part of the bidding process for the Caltongate assets, but said it had not been named as a preferred bidder by Deloitte.

Tom Buchanan, the council's economic development leader, said: "We are, of course, keen to work closely with any selected bidder to ensure that this large chunk of Edinburgh's city centre can be brought back to life."