Iconic site up for sale
Hotel option for Frasers as building put on market
Prime site: The Frasers building is on the market
House of Frasers’s department store building in Edinburgh’s west end is on the market for £13.7 million, prompting speculation that it could be turned into a hotel, offices or residential apartments.
The building at the corner of Princes Street and Hope Street is being marketed through two agents who have listed a range of potential uses, although House of Fraser has given no indication of surrendering its lease which has 40 years remaining.
However, the company also owns Jenners, further along Princes Street and property analysts believe there is an opportunity to expand the city’s range of hotels in prime locations.
Jackson Criss, which is seeking a buyer with Knight Frank, said: “In our opinion, the building is highly reversionary in the open market, either letting it as a whole or in separate parts.
“Should the building become available, we believe there would be strong interest either in the whole premises as retail or sub-divided, which could include the following uses: retail, restaurant / bar, hotel, office or residential.”
The building was erected in 1877 as the Osborne Hotel, and following a fire two years later became the Scottish Liberal Club. In 1894 Robert Maule & Son took over, turning it into a city institution and famous meeting place.
In 1931 Binns moved in and a new building was erected. House of Fraser acquired Binns in 1953 and in 1981 the business was branded ‘Frasers’. There is now a Caffe Nero in part of the ground floor.
The 71,553 sq ft building over six floors is let on two leases to House of Fraser (Stores) until 2058 on an annual rent expected to increase to £743,200 following a review. This equates to a net initial yield of 5.11% and 5.69% on settlement of the Princes Street review in 2029.
Jackson Criss said it believes a rental of £1.5m could be achieved.
Jenners is let on an annual rent of £2.615m, reflecting an overall rate of £14.20 per sq ft. The property was sold for £53m in August to Danish billionaire Anders Povlsen who owns the clothes retail chain Bestseller Group.
House of Fraser reported a pre-tax profit of £13.1 million on turnover of £814.7m in the year to the end of January 2016.