THE building that houses the former Old Printworks pub near Glasgow's George Square has been sold to budget hotel chain Z Hotels which the agent for the seller believes is a sign of investor enthusiasm for the city's hotel market.

The sale price of the building at 36 North Frederick Street was not disclosed although the property was on the market for offers over £700,000.

The previous owner was a company called the Trustees of the Firm of the Hampton Court Hotel whose other property is the Sandyford Hotel in Glasgow.

Steven Fyfe, senior surveyor at Jones Lang LaSalle, said: "The sale demonstrates there is an appetite for developers, investors and operators to enter the Glasgow hotel market."

Z Hotels was launched 18 months ago by two former Thistle Hotel executives to compete with the likes of Travelodge with sites in city-centre locations.

The company already has two hotels in London and one in Liverpool.

The Glasgow property, which has four storeys and an attic, will be its Scottish offering.

Mr Fyfe said: "The development potential of the former Old Printworks building is excellent as the property benefits from full planning and listed building consent, which were both granted for use of the premises as a public house and hotel.

"The property is also eligible for the Business Premises Renovation Allowance tax-saving equity scheme, which made it even more attractive.

"The location of the site, at the heart of the city centre, is ideal for a hotel brand which committed to accommodating city dwellers."

Z Hotels styles itself as targeting "urbanites" who want "central hotels with uber-modern interior design".

The Old Printworks pub closed in 2009 and was acquired shortly afterwards by the individual behind the Firm of the Hampton Court Hotel.

It had been part of the Dark Star Scotland bar empire that included the Budda bars which was owned by Alistair McKever, the tycoon behind controversial homeless hostels near Queen's Park until it folded weeks before the pub's closure.

Two years ago the Old Printworks was hit by a serious fire that started on its roof.

A recent hotel survey published by accountancy firm PKF gave a mixed picture of the Glasgow hotel market.

It found revenue per room in January declined 1% to £31.97 in spite of a 0.7% rise in occupancy. The sector has been hit by falling business travel budgets as well as a squeeze on individuals' disposable incomes as wage growth lags inflation.