67 Queen Street, Edinburgh, EH2 4NA
Asking £1,200,000 (Offers Over) sits materially above any positive land residual under the conservative SA underwrite (5 units, £180 net ADR, ×6 multiplier). At the upper-end 15% hurdle the available-for-site residual is negative. Under a premium ADR scenario (£220 net), the residual at the upper-end hurdle reaches a negative figure. The deal does not work under conventional finance using the methodology's SA Profits Method defaults; see methodology gaps in considerations.
Sanity flag. Conservative SA underwrite produces a negative or near-zero land residual. The asking price assumes either premium ADR (above £200 net), an ×8 valuer multiplier (proven operator), partial cash purchase, or alternative-use thesis (boutique offices, owner-occupier conversion, residential reinstatement) rather than the 5-unit SA conversion that is being marketed.
Offer explorer
Lender lens · five ratios
65% LTV · 8% IO · 7% costs · NOI £108,900 · VP £653,400 (lender basis)
A vacant A-Listed Georgian townhouse on Queen Street in Edinburgh's New Town, marketed at Offers Over £1.2m for proposed conversion to a five-unit Serviced Apartments operation (a unit count chosen to sit above the Edinburgh Short-Term Let licence-exemption threshold, although the property remains within Edinburgh's STL Control Area and therefore still requires planning permission for change of use). The Profits Method, applied with the conservative default parameters (net ADR £180, 60% stabilised occupancy, 50% cost ratio, ×6 valuer multiplier) produces an MV2 of £653,400 and a stabilised NOP of £108,900. Against a build cost of £1,277,625 (Cat A listed conversion to residential at £125/sqft with a 25% listed premium plus 10% professional fees and 18 months of finance on £1.4m peak debt), the development hold-intent residual at the 15% c-on-c hurdle is negative — the deal does not pencil at conventional finance. A premium ADR scenario (£220 net) with the same ×6 multiplier shifts the upper-end residual to a negative figure, still well below asking. The asking price implies either an ×8 multiplier (proven operator, established trading history), an ADR substantially above £220 net, partial cash funding, or a different value thesis altogether (boutique offices, owner-occupier conversion, family townhouse reinstatement, multi-let high-end residential lets). Each alternative path carries different planning, capex, and execution profiles that fall outside the SA framework the listing pitches.
- Cat A listed, World Heritage Site, Edinburgh STL Control Area: planning permission for change of use to SA is medium-to-high risk, not permitted development.
- Currently educational fit-out (Class 10) interconnected to no.66; separation works and Listed Building Consent required before any meaningful conversion can start.
- Conservative SA underwrite produces a negative residual at asking. The 5-unit pitch does not appear to support £1.2m+ on the methodology's default parameters (×6 multiplier, 60% stabilised occupancy).
- Prime Edinburgh New Town address (UNESCO WHS), 0.8 miles to Waverley: the location anchor supports premium ADR positioning if execution is high-quality and capital structure is right.
- Heritable title, VAT not elected, vacant on completion: a clean transactional starting point for any chosen end-use.
- 4,581 sqft NIA over five floors gives flexibility for multiple end-uses (5-unit SA, smaller-unit SA, boutique residential, professional offices) once planning route is established.
- Planning risk. Edinburgh STL Control Area means change-of-use for SA requires planning permission; New Town WHS and Cat A listing place this at Medium-High risk. Refusal would invalidate the SA underwrite.
- Conversion cost overrun. Listed building works to fire-separate five self-contained units within an A-Listed Georgian fabric typically exceed the budgeted +25% listed premium. A figure 40-60% above the £125/sqft base is plausible.
- ADR / occupancy realisation. The deal underwrites on a £180 net ADR (£216 gross) at 60% Year-2 occupancy. Edinburgh New Town premium SA achieves these numbers in peak operators; ramping a new product to 60% within 12 months is the operating risk.
- Pre-application advice from City of Edinburgh planning on SA change of use within the New Town WHS.
- Detailed costed survey from an LBC-experienced architect: party walls with no.66, structural separation, fire compartmentation between flats, vertical service runs.
- Comparable evidence: recent New Town SA / aparthotel transactions, achieved ADR and occupancy from operator P&Ls (AirDNA, Knight Frank Hotel Capital Markets).
- Cat A Listed building. Listed Building Consent required for fire compartmentation, services, and any alteration to listed fabric (cornicing, staircase, cupola). Conservation officer engagement throughout works.
- £1.2m+ asking price. Lot size exceeds the conservative SA underwriting envelope. Institutional / family-office buyers will price on ×8 multiplier and proven operator covenant, both unattainable for a first-time SA acquisition.
- Adjoining no.66. Separation works, party wall agreements, shared services apportionment, and potential easements all sit before commencement. Treat as a closure condition of the sale.