MRP has marked a key milestone at 60 Morrison Street in Edinburgh, finalising a pre-let with Dalata Hotel Group for a new 256-bedroom, four-star Clayton Hotel, securing development finance from AIB and beginning construction on the £95 million project.

The scheme will deliver Dalata's second Clayton Hotel in the capital, strengthening the group's footprint in one of the UK's strongest hotel markets. Next to the Edinburgh International Conference Centre (EICC), the hotel is expected to draw robust demand from corporate, conference and leisure guests and represents a significant city-centre investment.

Design-and-build contractor McAleer & Rushe has started on site to reconfigure and extend the existing six-storey office block. The structure will be retained and stripped back to its frame before three additional floors are added, creating a contemporary nine-storey hotel with a restaurant, bar, gym and business facilities.

Targeting BREEAM 'Excellent' and an EPC 'A' rating, the project combines the lower-carbon benefits of retaining and repurposing the current building with the delivery of a highly energy-efficient hotel in the heart of Edinburgh.

The development builds on long-established relationships between MRP, Dalata, McAleer & Rushe and AIB, with the four organisations having collaborated on multiple successful projects across the UK and Ireland.

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Angus Monteith, Development Director at MRP, said: "The commencement of construction, alongside the support of Dalata as operator and AIB as funding partner, represents an important step forward for this development. Edinburgh continues to demonstrate strong fundamentals as a hotel market, underpinned by a vibrant tourism sector, a growing conference market and a resilient business economy. We have worked successfully with both Dalata and AIB for many years and are pleased to be partnering with them again to deliver a high-quality hotel in one of the city's most sought-after locations."

Mark Diamond, Senior Director at McAleer & Rushe, said: "We are delighted to have commenced construction at 60 Morrison Street. Building on our extensive experience in delivering high-quality hotel developments and complex city-centre regeneration projects, this project demonstrates how existing buildings can be successfully repurposed to create modern, sustainable developments that meet changing market needs supporting the continued regeneration of city centres."

Shane Casserly, Deputy CEO of Dalata Hotel Group, said: "This will be our second Clayton Hotel in the city and it represents another important investment in a market where we continue to see strong long-term demand from both business and leisure travellers. This is an exceptional city-centre location adjacent to the EICC, one of the UK's leading conference venues, and we look forward to working with MRP and McAleer & Rushe to bring a high-quality new hotel offering to Edinburgh."

Paddy McGuigan, UK Manager, Commercial Real Estate at AIB, said: "AIB is pleased to support MRP on the delivery of this significant investment in Edinburgh city centre. The combination of a prime location, an experienced development and construction team, and the strength of Dalata's Clayton brand provides a compelling proposition for the market. We have enjoyed a longstanding relationship with MRP and are delighted to support the next phase of growth through the development of this high-quality and energy efficient hotel scheme, which will benefit the local and national economy."