Dalata hotel group has bought a development site at 28 St. Andrew’s Square in Edinburgh for £12.5 million.
The site, purchased from Aviva Life & Pensions UK, includes a Category A listed building which is currently vacant and approved for office use, with planning permission granted for an extension to both the rooftop and rear of the property.
Dalata plans to submit a revised planning application in the first quarter of 2024 next year, which will allow it to build a new 4-star Clayton Hotel. The new hotel will comprise 153 bedrooms, a bar, restaurant, dry gym and two large meeting rooms. Completion of the new hotel is scheduled for mid-2026.
Dalata says the hotel will be designed to operate with zero on-site carbon emissions, adding that the overall investment in the project, including the site purchase, is expected to total around £48 million.
Separately, the hotel operator says it has now completed the €29.5 million acquisition of a leasehold interest in the 4-star Hard Rock Hotel Amsterdam American from Zien Group. The hotel is being rebranded to Clayton Hotel Amsterdam American and Dalata will invest around €4.5 million to enhance the property. Dalata expects stabilised annual earnings of around €5 million for this asset.
Why it matters
Dalata has been very active this year, with its quick succession of high-value deals – especially during a year which has seen muted transactions – securing it a place on the list of standout players in the sector during the year.
It’s continued interest in Scotland shouldn’t come as a complete surprise as investors continue to snap up opportunities in the region, the latest being Warner Leisure Hotels’ purchase of the 4-star Dalmahoy Hotel and Country Club near Edinburgh. Another transaction of note is Henderson Park’s £85 million acquisition of Waldorf Astoria Edinburgh – The Caledonian.
What they said
Dermot Crowley, CEO of Dalata said: “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. We are also delighted to have secured our first Clayton hotel in Amsterdam. The American Hotel has a renowned reputation in the city and we will continue to protect and enhance that with our Clayton brand.
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 at 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. We look forward to collaborating with Edinburgh authorities to deliver a flagship Clayton hotel with zero onsite operational carbon by mid-2026.
Additionally, Amsterdam has been a priority location for Dalata since we commenced our journey into continental Europe. To have acquired such an attractive existing hotel, in a city which has traditionally high barriers of entry, is a testament to our standing in the market and a credit to all involved across the Group.”