Planners hold key to £12m hotel development for Princes Street

A MAJOR hotel which will go into direct competition with the Balmoral on Princes Street is set to get the go-ahead from city planners.

The hotel, which is expected to be either four or five-star, would be built above shops occupied by retailers including Burger King and Waterstone's.

Under plans drawn up by one of Britain's biggest property investment companies, the 12 million development is expected to form part of a refurbishment of the first building at the east end of Princes Street.

The four ground-floor retail units, which also include two tenants on temporary leases, would be revamped in a bid to attract big-name retailers.

Aberdeen Property Investors (API) - a subsidiary of global giant Aberdeen Asset Management, which manages 114 billion of assets - is the firm behind the proposals. The new hotel and retail scheme would link in with the proposed St James Quarter development around the corner.

Earlier this year, city leaders hailed the development as a major boost to the council's "string of pearls" masterplan drawn up to encourage the regeneration of Princes Street. Now officials have recommended the hotel gets the go-ahead when councillors vote on the scheme at tomorrow's planning committee.

The developers will be asked to contributed 207,000 to the city's tram project if the scheme is approved.

It is understood that API had been in talks with the council's planning team for a year before details of the proposal emerged.

However, the firm is remaining tight-lipped and today refused to reveal whether it had an operator lined up for the site.

Each of the retailers on the ground floor is thought to be on a short-term lease that would allow development to move ahead quickly.

Russell Imrie, of the Edinburgh Principal Hotels Association, said he would welcome another hotel on Princes Street.

He said: "We're in a free market and if an operator feels there is demand on Princes Street then that's something which they're free to do.

"The city remains a popular destination for both business visitors and tourists so another big quality hotel can only benefit the city."

Earlier this year, Councillor Tom Buchanan, the city's economic development leader, said the development would bring the council's "string of pearls" project - which aims to improve the quality of offerings on Princes Street - a step closer.

If the development goes ahead it will become the third new hotel to be built on Princes Street, with plans under way for a new Premier Inn at number 121-123 as part of developer Deramore's 40m scheme, which also includes New Look.

Sir Stelios Haji-Ioannou's easyGroup empire also opened its first Edinburgh easyHotel at 125a Princes Street.