Gloucester-based investment provider Blackfinch Property has signed a deal to provide a £5.6m bridging loan for a net-zero luxury hotel development overlooking Edinburgh Castle.

The finance, with a 12-month duration, will be used to facilitate the acquisition of a property which will form part of the development in the heart of Scotland's capital.

A spokesman said: "The hotel development project will rejuvenate three dilapidated mixed-use retail/office buildings on Princes Street, with views over Edinburgh castle."

The bridging loan will facilitate the purchase of a third adjacent property which will form part of the hotel development plan, they added.

"The borrower has received planning permission to redevelop the three retail units into a 347-bed hotel, with an agreement for lease already signed with an international hotel operator."

The project was subject to a tight deadline of four weeks and, as a Scottish transaction, required engagement with law firms practicing Scottish law. In accordance with Blackfinch Property's commitment to sustainability and environmental, social and governance (ESG) criteria, the hotels development target is to be net zero carbon, constructed using sustainable materials and building practices.

Nicola Mayes, Investment Manager at Blackfinch Property, said: "We are pleased to be funding this exciting project which will bring several vacant buildings back into use. The borrower's plans for this project closely align with our own ESG principles of developing energy efficient property and improving the quality of existing buildings.

"We are also pleased to have been able to forge a new relationship with this borrower, and being able to contribute towards this project which has helped to develop and broaden our in-house legal expertise, and boost our presence in Scotland."