Hotel scheme aims to add a real touch of glass to Princes Street

DRAMATIC images were unveiled today of how a Georgian building would be encased in glass to become the first new hotel on Princes Street in five decades.

The unusual architectural style, popular in Berlin, is set to become a major talking point over the coming months.

City leaders today hailed the £40 million development as a chance to kick-start hopes of regenerating the historic thoroughfare. Backers also claimed the hotel would act as a catalyst for future retail schemes.

The 103-bedroom hotel, including a bar and restaurant looking towards Edinburgh Castle, would be built at 121-123 Princes Street. The site has been smothered in scaffolding for around five years and is currently home to a string of three souvenir shops at ground level, with the upper floors empty. Womenswear firm New Look has already signed up to replace these shops at the lower levels.

The Deramore Property Group said its use of "glass treatment" – similar to Edinburgh's Festival Theatre – would "retain and revitalise" the historic infrastructure. The glass could be illuminated for special events, such as Hogmanay.

Concerns have been expressed about the loss of historic buildings, with a B-listed property earmarked for demolition but city economic leader Tom Buchanan said the hotel would "re-enforce" the council's "string of pearls" concept, under which Princes Street will be divided into sections, such as high street shopping, boutique stores, al fresco dining and a cultural quarter.

"Deramore's proposals send out a strong signal of investor confidence not only in Edinburgh's city centre, but also in the west end of Princes Street as a retail destination," he said.

"It is also encouraging that Deramore is committed to investing in high quality design – this will vastly improve upon the current physical amenity of this part of Princes Street and also help set a benchmark for other major city centre development proposals."

The last hotel to be built on Princes Street was the Mount Royal in 1955, and the last major development to get the go-ahead, in 2002, saw the former Burberry and C&A department stores knocked down and replaced.

The plans for the new hotel have been drawn up by SMC Hugh Martin Architects – the firm behind the Waverley Gate office development in Edinburgh's former GPO building.

Planning consent is already in place for the demolition of properties on Rose Street Lane South, one of which is C-listed, with the upper floors on Princes Street earmarked for office use. Permission is needed to alter this.

Under the new proposals, the Georgian building at 123 Princes Street would be largely retained, but the B-listed Victorian building at 121-122 Princes Street would be lost, with the exception of the gable ends and chimneys.

Local SNP councillor David Beckett said he has "reservations" about the building's demolition.

"The developers seem to be trying to do something different, so I'm prepared to consider that," he said. "Although they tell me it wouldn't be economically viable to keep the building they want to knock down, I'll be speaking to Edinburgh World Heritage about that."

The views of Edinburgh's heritage bodies will be key, but representatives from Historic Scotland and the Cockburn Association said they could not comment at this stage.