Former Powderhall stables to be turned into community hubs with space for art studios, Picture: Lisa Ferguson

The City of Edinburgh Council has allocated £500,000 towards refurbishing and upgrading Powderhall Stables on Broughton Road and hopes to re-open the site as a community and work hub.

But the redevelopment will only go ahead if additional grant funding is secured.

The council believes there is a “glut of demand” for studio space following the decision by the Caledonian Trust to sell St Margaret’s House to Drum Property Group. More than 200 workshops for artists, craftsmen and painters under the umbrella of Edinburgh Palette have been put at risk by the sale of St Margaret’s House.

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Andrew Chainey, development manager for Edinburgh Palette, said: “We welcome any new studio development in Edinburgh, given the demand.

“I don’t think Edinburgh is well provided enough in terms of studio space. We have had such demand here – people are always looking for space.”

He added: “Certainly I see this as a positive step by the council. I know the site and in terms of location, it’s fantastic.

“We are open to any suggestions or approaches regarding buildings and land. We are keeping our options open at this stage. If we can be involved in some of these projects, it would be great.”

The council is hoping to tally up the remaining £1 million for the Powderhall Stables scheme from external grants but has promised the initial £500,000 from the City Strategic Investment Fund.

Paul Lawrence, the council’s executive director of place, said: “It is anticipated that the existing offices on the first floor of the building could be turned into offices and studios which could be let out to artists and micro-enterprises, while the ground floor could potentially be turned into a flexible function space and other uses.

“The project would aim to meet the strong demand for workspaces and function spaces in central Edinburgh. It is ­estimated that the building could support between 21 and 56 full-time equivalent jobs.”

The B-listed building, which was built in 1893, is currently in a “poor condition” with ­“major defects”, according to the ­council.

Mr Lawrence added: “Multiple repairs are needed, including to the roof, stonework, ceilings and doors and windows.

“The interior is highly dated and generally unsuited to ­contemporary occupier requirements.”

There is potential that the hub could be transferred to community groups in the future.