An historic Edinburgh building is set to be transformed into the latest boutique hotel for Malmaison Hotel du Vin Group following a £25m financing deal.

Grade A listed Buchan House is located in a prime position on St Andrew Square in the heart of Edinburgh’s New Town.

The work will transform it into a 72 bedroom Malmaison hotel complete with Chez Mal Bar and Brasserie after developer S Harrison appointed Edinburgh based Sharkey as principal contractor.

York based S Harrison has also now signed a forward funding agreement, with an end value in excess of £25million, with a FTSE 100 pension fund, to finance the development.

When the 72-bedroom hotel opens in 2019, it will be the second Malmaison in the City and will create approximately 50 new jobs.  The building’s period features will be restored and Malmaison will inject its distinctive, stylish aesthetic to make Buchan House a unique hotel offering within the famous Georgian architecture of the New Town.

S Harrison’s development director, David Clancy, said: “We’re delighted that work is underway to restore this historic building and give it a new lease of life as an exceptional hotel in a highly sought after location.  Sharkey has a strong track record working on prestigious hotel projects throughout the UK and an unrivalled local knowedge of the Edinburgh market, which made them the ideal contractor for this development.

“Securing a forward funding agreement with a major UK pension fund is also a huge coup and speaks volumes about the level of confidence that currently surrounds Edinburgh’s property market as a whole.”

Sharkey’s managing director, Billy Harrison, added: “This is a high profile hotel development in a historic building at the heart of Edinburgh’s New Town, which makes it a superb project to be working on.  In recent years we’ve successfully completed a vast range of hotel projects throughout the UK, for many leading names in the industry, and will utilise all our sector experience to create a stunning, landmark hotel, that Edinburgh can be proud of.”

The new hotel will complement the popular Malmaison Edinburgh Leith, which famously occupies the site of a former “house of ill-repute”, and was the first ever Malmaison to open in 1994.  It also marks the latest development in a period of significant growth and investment for the brand.  This includes plans to introduce Malmaison to York and Bournemouth, as well as the continued roll-out of its contemporary Chez Mal bar and brasserie and its innovative Work + Play meeting and events concept.

This project is S Harrison’s second development for the Malmaison Hotel du Vin Group, having recently handed over a luxurious Hotel du Vin in Stratford-upon-Avon.  The work has seen two Grade II listed Georgian townhouses transformed into a stunning 46-bedroom hotel, close to the centre of Shakespeare’s hometown.

S Harrison has built a strong and growing presence in Edinburgh following its successful £23 million redevelopment of a site on Leith Walk in 2016.  The site was formerly part of Edinburgh’s original Botanic Gardens and was transformed into a 240-bedroom, student accommodation scheme.  S Harrison has also recently bought two other sites in the Leith and Haymarket areas of the city and continues to explore other opportunities in the area.

S Harrison was advised by the Edinburgh offices of Ryden and Brodies.  The fund was represented by CMS, D2 Property and Christie & Co.