'Another important investment in the market': Northern Ireland construction secures £95m deal to deliver 256-bed four-star hotel

A Co Tyrone construction firm has reached a major milestone on a £95 million city centre hotel development in Edinburgh after securing a pre-let agreement with one of Ireland’s largest hotel groups.

McAleer & Rushe’s development arm, MRP, has confirmed a deal with Dalata Hotel Group to deliver a new 256-bedroom, four-star Clayton Hotel at 60 Morrison Street.

The agreement has also secured development funding from AIB Group, allowing construction to begin on the landmark project, which will become Dalata’s second Clayton Hotel in Edinburgh.

Located beside the Edinburgh International Conference Centre (EICC), the development is expected to benefit from strong demand across the business, conference and leisure tourism markets.

MRP has already commenced works to transform and extend the existing six-storey office building. The project will see the structure retained and stripped back to its frame before the addition of three new storeys, creating a contemporary nine-storey hotel complete with restaurant, bar, gym and business facilities.

Designed to achieve BREEAM ‘Excellent’ and EPC ‘A’ ratings, the development will combine the environmental benefits of retaining and repurposing an existing building with the delivery of a highly energy-efficient hotel in the heart of Edinburgh.

The scheme builds on the longstanding relationships between MRP, Dalata, McAleer & Rushe and AIB, with all four organisations having worked together on a number of successful developments across the UK and Ireland.

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, continued: "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, explained: "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, added: "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."