Dalata acquires Edinburgh hotel development site

Ireland’s largest hotel operator Dalata Hotel Group has acquired a development site at 26 St. Andrew Square in Edinburgh.

The site – located in Edinburgh’s New Town – sits adjacent to top luxury shopping destination Multrees Walk and is situated nearby to Edinburgh Waverley train station.

The development site was acquired for a total consideration of £12.5m from Aviva Life & Pensions UK, which was paid from Dalata’s existing cash and banking facilities.

It comprises a vacant Category A listed building which is currently approved for office use, with planning permission granted for an extension to the rooftop and rear of the property.

Dalata intends to submit a revised planning application in the first quarter of next year to enable the construction of a new 4-star Clayton Hotel, which is expected to be completed by the middle of 2026.

Subject to a successful revised planning application, the hotel will comprise 153 bedrooms, a bar, restaurant, a gym, and two large meeting rooms on the first floor overlooking St. Andrew’s Square.

The overall investment in the project, including the site purchase, will be around £48m.

Dalata is also set to enter the hotel market in the Netherlands after acquiring the leasehold interest in Hard Rock Hotel Amsterdam American for a total consideration of €29.5m (£25.5m) from Zien Group. It will be rebranded to Clayton Hotel Amsterdam American.

Dermot Crowley, CEO of Dalata, said: “Today is an important day for the Dalata team as we announce two significant developments for the group.

“Edinburgh has long been a target city for us to locate our brands and we are delighted to have secured such a prestigious building in the centre of the city. This will be our third hotel in Scotland.

“In the year to date, we have announced four new opportunities in three of the strongest city hotel markets in Europe – London, Amsterdam and Edinburgh. We will continue to seek out further opportunities in our target markets.”

Shane Casserly, corporate development director of Dalata added: “Edinburgh is one of the top performing hotel markets in Europe and we are delighted to secure a development site in such a prestigious location. Our development team has extensive experience and history in delivering complex projects, we look forward to collaborating with Edinburgh authorities, to deliver a flagship Clayton hotel with zero onsite operational carbon by mid-2026.”