Grade A-listed Buchan House is located in a prime position on St Andrew Square in the heart of Edinburgh’s New Town. The work will transform it into a 72 bedroom Malmaison hotel complete with Chez Mal Bar and Brasserie.

York-based S Harrison has also now signed a forward funding agreement, with an end value in excess of £25 million, with a FTSE 100 pension fund to finance the development.

When the 72-bedroom hotel opens in 2019, it will be the second Malmaison in the city and will create approximately 50 new jobs. The building’s period features will be restored and Malmaison will inject its distinctive, stylish aesthetic to make Buchan House a unique hotel offering within the famous Georgian architecture of the New Town.

S Harrison’s development director, David Clancy, said: “We’re delighted that work is underway to restore this historic building and give it a new lease of life as an exceptional hotel in a highly sought after location. Sharkey has a strong track record working on prestigious hotel projects throughout the UK and an unrivalled local knowledge of the Edinburgh market, which made them the ideal contractor for this development.

“Securing a forward funding agreement with a major UK pension fund is also a huge coup and speaks volumes about the level of confidence that currently surrounds Edinburgh’s property market as a whole.”

Sharkey’s managing director, Billy Harrison, added: “This is a high profile hotel development in a historic building at the heart of Edinburgh’s New Town, which makes it a superb project to be working on. In recent years we’ve successfully completed a vast range of hotel projects throughout the UK, for many leading names in the industry, and will utilise all our sector experience to create a stunning, landmark hotel, that Edinburgh can be proud of.”

The new hotel will complement the popular Malmaison Edinburgh Leith, which famously occupies the site of a former “house of ill-repute”, and was the first ever Malmaison to open in 1994. It also marks the latest development in a period of significant growth and investment for the brand.

S Harrison has built a strong and growing presence in Edinburgh following its successful £23m redevelopment of a site on Leith Walk in 2016. The site was formerly part of Edinburgh’s original Botanic Gardens and was transformed into a 240-bedroom, student accommodation scheme. The firm has also recently bought two other sites in the Leith and Haymarket areas of the city and continues to explore other opportunities in the area.

S Harrison was advised by the Edinburgh offices of Ryden and Brodies. The fund was represented by CMS, D2 Property and Christie & Co.