Work will start this month on a £45m development on the edge of Edinburgh’s Royal Mile to bring a new hotel-led, mixed use development to the Castlehill area of the city.
Multi-sector property developers, Chris Stewart Group, have announced that they have completed the purchase of a 140,000 sq ft site and have agreed terms with Motel One, one of Europe’s fastest growing hotel groups, to anchor the development by opening their first UK hotel in the Scottish capital next summer.
Motel One, a luxury budget operator which has 32 hotels in Germany and two in development in Austria, have agreed terms for a 208 bedroom hotel located in the former buildings of Edinburgh City Council’s Economic Development department on Market Street.
The £25m hotel will form the cornerstone of the development which already has planning consent and will include 30,000 sq ft of residential space including self catering apartments, plus six office premises comprising 10,000sq ft each, and two new restaurants. The development site which stretches from Market Street towards Advocates Close off the Royal Mile will take three years to complete.
Chris Stewart, the award-winning property developer who has been converting historic buildings in Scotland for over 15 years, said that the agreement with Motel One was crucial in securing the future of the site. He commented;
“Bringing Motel One in to anchor the whole development kick starts the regeneration of a key part of the Old Town which will take place over the next three years. I am delighted that we can now start to physically move the project forward.
“Motel One were introduced to me by Scottish Development International at the annual International Investment Hotel Forum in Berlin and it was clear that they were actively looking at the UK.
“Edinburgh was high on their target list and although this site has been challenging for us due to its sensitive nature and historic context, we were sure it could provide Motel One with everything they were looking for. I hope that Market Street is the first of many projects which we do with Motel One.”
Anne MacColl, Chief Executive Officer, Scottish Development International, commented;
“On behalf of Scottish Development International, I am pleased to welcome the announcement of Motel One’s first UK property in Edinburgh. SDI has been actively engaged since early 2008 to help them identify the right property to grow their European business as well as introducing them to the property’s developer, Chris Stewart.
“UK hotels continue to be the most occupied in Europe, with Edinburgh showing the highest occupancy in the UK outside of London. Motel One’s decision to locate in Edinburgh reinforces the fact that Scotland presents significant opportunities for hotel development and this project will help to generate additional tourism revenue for Scotland from increased international visitors.”
Market Street will be the fourth major hotel development carried out by Chris Stewart Group in recent years. The company has successfully developed three other sites in Edinburgh City Centre, two on Waterloo Place now occupied by Apex Hotels and Travelodge, and one further site on Baxter’s Place which is due to move forward later this year.
Motel One’s arrival in the capital will bring the total number of hotel beds generated by Chris Stewart Group to over 700 in the past four years, making the company Scotland’s most successful hotel developer. Stewart continued; “We are very busy on a number of developments and considering acquiring a number of new sites for multi-sector opportunities in prime locations. Most interestingly, we are in talks with a number of international brands who are keen to establish a presence in the Scottish market. We are in a strong cash position and have secured some financial backing to allow us to buck the trend in the market at the moment.”
Chris Stewart Group also includes a highly successful residential business which is currently selling Elie House in Fife and a collection of upper-end executive flats on the Mound in Edinburgh. A third Edinburgh residential project in the West End of the city will be announced shortly which will include a mixture of city loft apartments and office space.
Chris Stewart Group has developed from a niche residential developer 15 years ago into a multi-sector real estate development and investment business. The group of companies is owned by award winning property developer Chris Stewart who has been praised for redeveloping complicated city centre sites and listed buildings totalling over 30 projects since 1996. Chris Stewart was recognised for his achievements by the UK property industry with an award presented by Property Week in 2009.