Fire destroys former Debenhams building set for £50m hotel redevelopment
The Princes Street building which has been destroyed by a major fire was due to be part of a new hotel and pod-hotel in the former Debenhams store.
The development was due to see 328 bedrooms plus 345 “capsules” or pods, with retail on the ground floor.
Debenhams closed in May 2021 after 243 years’ trading. The site was all set for a £50 million transformation into a 210-bedroom luxury hotel with a rooftop bar/restaurant, and cafe and wine bar on the lower levels, along with an urban spa and wellness centre.
Planning permission was granted. But owners Legal & General scrapped the scheme in September 2023 and instead put the property up for sale.
Criterion Capital, which is headed by billionaire investor Asif Aziz, bought the 116,500sqft site at 109-122 Princes Street for an undisclosed sum.
The project was to be a first hotel in Scotland for his Zedwell hotel brand, featuring "cocoon-type rooms" and "capsule beds in dormitories". Mr Aziz said at the time: "Opening our first hotel in Scotland is a significant step in our ambitious UK-wide expansion."
Planning permission was granted in March 2025 and the final go-ahead was given in February this year after agreement was reached on developer contributions.
Part of the Debenham’s store, 112 Princes Street, was originally the Conservative Club, dating from 1882-4. An arcaded stair and stained-glass windows from that time survived, but were relocated within the building.
The building affected by the fire, at 109, 110 and 111 Princes Street, was the Palace Hotel in 1869 and later became the Liberal Club.
River Island, at 111 Princes Street, closed as part of a restructuring exercise announced in June 2025 in a bid to save the company. The family-owned fashion chain said it was shutting 33 of its 230 stores, blaming “the migration of shoppers from the high street to online”.
They set a closing date of September 5, 2026, for the Princes Street store, while retaining their branches at Fort Kinnaird and the Gyle.
Head of Investigations
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