Prominent Edinburgh building housing hotel, shops and restaurants bought for £23.4 million

A prominent building that houses a 145-bedroom budget hotel, three shops and two restaurants in the heart of Edinburgh has changed hands in a £23.4 million investment deal.

Hanover Buildings occupies a prime position on the capital’s Rose Street, between Hanover Street and St Andrew Square. The hotel-anchored development comprises a 145-bedroom Hub by Premier Inn and five retail and leisure units, let to Lucy & Yak, William Hill, Cotswold Outdoor, Assaggini and Veeno.

The hotel is secured on a long index-linked lease and accounts for approximately 70 per cent of the scheme’s overall income.

A street view of part of Hanover Buildings, which occupies a prime position on Edinburgh's Rose Street, between Hanover Street and St Andrew Square.

Property consultancy Lismore Real Estate Advisors said it had advised on the £23.4m acquisition of Hanover Buildings on behalf of Lothian Pension Fund from Oval Real Estate. The acquisition price reflects a net initial yield of just under 5.7 per cent.

Lismore director Colin Finlayson said: “Investor demand for hotels across the UK remains particularly strong and this is increasingly evident in Edinburgh, where global tourism and business travel continue to underpin robust occupancy levels.

“With supply relatively constrained, well-located, income-secure assets such as Hanover Buildings are attracting significant interest and offering compelling long-term returns for our client.”

Nicola Barrett, portfolio manager of Lothian Pension Fund, said: “Hanover Buildings is a high-quality, income-producing asset in a prime city-centre location. The strength of the hotel covenant, combined with diversified retail and leisure income, aligns well with our strategy of securing resilient, long-term real estate investments that deliver stable returns for Lothian Pension Fund.”

Premier Inn, owned by Whitbread, has been one of the most active players in Edinburgh's hotel market in recent years.

Lismore and CMS advised Lothian Pension Fund on the acquisition, while Westwood Real Estate and DLA acted for the seller, Oval Real Estate.

Elliot Cassels, director at Westwood Real Estate, added: “The property generated interest from UK funds and overseas buyers who were attracted to the long index-linked hotel lease, and the vibrancy of the ground floor retail and leisure mix, where tenant and investor demand has rebounded in recent years.”

Last year saw Edinburgh grab top spot in the UK hotel league thanks to the city’s booming tourism and hospitality markets.

Property experts said the capital offered an “unparalleled investment opportunity” due to its thriving tourism industry, world-famous events such as its summer festivals and a steady influx of international visitors. As a result, Edinburgh secured the top position in the 2025 Colliers UK Hotel Market Index.

In a separate property deal, Knight Property Group said it had secured a new tenant for its refurbished office space at 110 George Street in Edinburgh.

The property consultancy found that Edinburgh had “exceptional” occupancy rates (averaging 85 per cent), strong average daily rate (ADR) growth (up 10 per cent from 2023), and robust revenue per available room, or RevPAR, performance - a key industry measure - (up 13 per cent on the previous year), making the city a “potentially attractive location for hotel investors and developers to consider”.

Whitbread owned Premier Inn has been one of the most active players in the city’s hotel market in recent years.

At the tail end of 2025, planning consent was granted for a 102-bedroom hotel, operating under the Hub by Premier Inn brand, on the edge of Edinburgh’s historic New Town. Artisan Real Estate was given the green light by the city council to transform a 1980s office block on the corner of Albany Street and Broughton Street into the hotel.

That deal was revealed just days after councillors gave the nod to the conversion of another 1980s city centre office block - Capital House on Festival Square, off Lothian Road - into a 195-bedroom Premier Inn hotel.

Meanwhile, Knight Property Group said it had secured a new tenant for its refurbished office space at nearby 110 George Street in Edinburgh.

Brindley Associates, the planning and development consultancy, is relocating from its current premises at Hunter Square and has agreed a ten-year lease on a 1,500-square-foot second-floor office suite within the building.

The suite forms part of the Grade B-listed Georgian townhouse, which has been refurbished to provide modern office accommodation within the historic building.

Ross Wilkie, managing director of Brindley Associates, said: “The space offers exactly what we were looking for: a high-quality, well-presented office that supports collaboration and provides a welcoming environment for both our team and our clients.

“As our business continues to grow, it was important for us to secure a workspace that reflects our ambitions and allows us to build on the strong relationships we have developed. George Street provides an outstanding setting for that, with excellent amenities and connectivity. We are very much looking forward to becoming part of the community here.”

Established in 1998, Brindley Associates supports planning and development projects across the UK.

Knight Property Group director James Barrack said: “We are very pleased to welcome Brindley Associates to 110 George Street and to have secured a high-quality occupier for the building. Brindley is a well-respected consultancy with an excellent reputation and their presence will further enhance the professional mix within the property.

“The refurbishment of the building has created a series of attractive, modern office suites while retaining the architectural charm that makes Georgian townhouses on George Street so distinctive.”

Graham + Sibbald and Cuthbert White are joint agents for Knight Property Group, with Q&A Law Practice being legal adviser.

Mundo McAndrew, an associate at Graham + Sibbald, said: “The letting highlights the continued demand for well-located, high-quality office space in Edinburgh city centre. Occupiers are increasingly seeking fully fitted, characterful offices that combine strong amenity provision with excellent accessibility.

“The suite at 110 George Street offers a well-presented space in a highly prestigious address, making it an ideal solution for Brindley Associates.”

Knight Property Group is a long established commercial property development company, with offices in Edinburgh and Aberdeen.

Landmark Edinburgh office building described as ‘first class asset’ gets new owner