Walking down the dim, dusty corridors of the former surgical building at the old Edinburgh Royal Infirmary, with a faint hospital whiff still in the air, it is difficult to imagine it becoming a bustling, upmarket hotel. It takes imagination to see how this listed building and the 19-acre city-centre site on which it stands will be redeveloped.
The first challenge developer Southside Capital faces is convincing people that things are moving forward. Originally, the project was a joint venture between Bank of Scotland Corporate and Taylor Woodrow, but the latter pulled out earlier this year and was replaced by residential developer Gladedale Group. The site is hidden behind huge blue hoardings which offer little clue to what is going on behind.
James Thompson, a director at DTZ, believes that having a strong development team is essential. “It needs focus and purpose to make it happen, and that has been lacking until now,” he says. “The developer has to engage with the market again and needs to show confidence and deliverability.”
This is something of which Jim McIntyre, chief executive of Southside Capital and in charge of delivering this colossal project, is only too aware. The developer is launching a marketing campaign to raise awareness within both the property industry and the local community.
But that is not to say that the site has been left untouched. McIntyre points out that two-thirds of the demolition work is now complete. And Quartermile, as the site has been renamed, is a complex redevelopment project with contamination issues and numerous listed buildings to work around. “There are no barriers to us starting construction,” he says. Indeed, the tendering process for the first phase is in full swing.
The mixed-use project will be dominated by residential but will also contain a substantial amount of office space in what is an untested location. Inevitably, some in the market are questioning whether offices will work there.
“It is not an office location and won’t be for some years. The office market is consolidating in the conference centre area [to the west of the city centre],” comments John Clement, partner at King Sturge.
Fragmented market
DTZ’s Thompson points out that the site is not on any of the main transport links, but he adds that the Edinburgh market has always been fragmented. “There is scope for new locations,” he says.
This is something that McIntyre, who hails from Glasgow, has experienced before, when the office market was polarised around Charlotte Square in Edinburgh’s New Town. “I was involved in the Exchange district in the late 1980s and early 1990s and was always told that office occupiers didn’t want to move west,” he says, “but we effectively created a new business hub. I think Quartermile is part of the office arc around the city centre. It’s less than a 10-minute walk to High Street and the castle.”
In a city that contains a world heritage site, development is always difficult. But one advantage Quartermile does have is that it could provide large, column-free office floorplates. McIntyre certainly sees the product as prime and the location as city centre, and says the rents will be pitched accordingly.
Edinburgh’s residential market has cooled to a position where steady and stable growth is expected in the next few years. The amount of residential being created at Quartermile, both as new build and in redeveloped listed buildings, is potentially enough to create a new community on the edge of one of the city’s most popular open spaces, the Meadows.
Clement says: “It is a cracking site and will be the most stunning residential scheme.”
Andrew Johnson, Knight Frank’s head of residential development in Scotland, agrees but cautions: “It’s taken a long time to put together but it is important that they get it right.”
He believes the key to success for residential will be providing varied product size and getting the specification right, particularly as there are a lot of large flats available in the city. But getting it right could reap exceptional dividends. “We could see close to the highest values achieved in Edinburgh for new build,” he predicts.
Some might say McIntyre is in an enviable position, having such a large site at his fingertips, but its prominence means that the finest details will be picked over and analysed. Thompson says: “Southside is staring the market in the eye on this, and the market is waiting for a response.”
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Central Edinburgh, looking north-west over the Castle and the Quartermile site |
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Key 1 Edinburgh Castle 2 Princes Street 3 Exchange district 4 Charlotte Square 5 Quartermile: first of four new office buildings 6 Quartermile: surgical building 7 Quartermile: some of the new and refurbished residential buildings |
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Quartermile: key facts ● Southside Capital, a joint venture between Bank of Scotland Corporate and Gladedale Group, is developing Quartermile. Foster & Partners is architect ● The 19-acre site has detailed planning consent ● Nine listed buildings will be retained, including the former surgical hospital and its clock tower ● More than 650 flats will be created in new and period buildings ● 3.2m sq ft of offices will be built ● 70,000-80,000 sq ft of retail and leisure will be built to cater to people living on the site ● The former surgical hospital will be converted into a 220-bed hotel — an operator has yet to be signed ● The project is expected to take seven to eight years to complete |
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Quartermile: at what stage? ● Two-thirds of the demolition work is completed ● Phase 1 is in the tendering process. This comprises three projects plus infrastructure work: Project 1 Residential development of around 115 units; construction is due to start in August Project 2 Refurbishment to create 50 homes; tender to go out soon. Work should start a month or two after Project 1 starts Project 3 Development of 116,000 sq ft of offices; tender to go out late June/early July; should start construction at the end of the year Infrastructure Construction work is due to start in August/September Occupation of the first home is expected in spring 2007, and of the first office that autumn. |
