Former school for the deaf considers sale

One of Edinburgh's most famous buildings could become the city's first five-star resort hotel if the site is sold as planned.

The owners of the former Donaldson's School for the Deaf - once hailed by Queen Victoria as 'finer than some of my Scottish palaces,' - are looking into a possible sale.

Cala bought the school - designed 150 years ago by Sir William Henry Playfair - in 2008, and planned to spend £80 million transforming the school into modern flats.

But now, Cala has come under pressure from its lenders to create value on the site, forcing it to consider selling up. The housebuilder today confirmed that the site is now attracting the interest of a number of top hotel brands.

A spokesman for Cala said, "We have had interest in the Donaldson's site and its potential for development as a five-star destination resort. The nature of the Playfair building and its immediate environment could be attractive to a hotelier.

"The 18-acre site would enable additional facilities associated with the five-star destination resort concept,” he added.

Peter Darroch, executive vice president of hotel real estate firm Jones Lang LaSalle Hotels, said, "It would be a very good site and a phenomenal building."

"Hotel operators will have always had an interest in this property but, historically, residential values were much higher, which made things difficult. Now that has started to change. It would be a superb luxury five-star hotel if it stacked up in terms of funding,” he added.

The site was previously sold in 2003 for around £15 million.

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