THE huge city centre block containing the closed-down Derrys department store could be turned into student flats and a budget hotel in a £50million development.
London-based Thames Bank Property Company has exchanged contracts for the 224,536sq ft block, subject to receiving planning permission.
Bosses have been in talks with Plymouth City Council and expect to submit plans next month which will see the block transformed into 500 student bedrooms and a 100-bed budget hotel.
There would also be ground-floor shopping and restaurant space created, but Thames Bank Property said the retail economy was not strong enough for the entire site to be stores.
Indeed, Derrys itself was one of the early casualties of the retail wipe-out of the past decade, closing in 2010 when Vergo Retail Ltd went into administration.
However, Thames Bank Property said five existing tenants, including the Argos and Ryman outlets, would be welcome to stay in the redeveloped building.
Thames Bank Property also plans to add an extra floor and do other works to upgrade the roof and the Courtenay Street area, adding new parts to the building.
Colin Morris, who runs Thames Bank Property, said he has been speaking to Plymouth City Council about the building for the past two years.
"We recently exchanged contracts to purchase the entire site, subject to planning," he said.
"We want to submit a planning application next month.
"We've been looking at the marketing of retail for the past five years, and it has not gone well," he said. "So we are looking at 500 student rooms and a 100-bed budget hotel, and the ground floor for retail/restaurant.
"We'll build the student beds to top specification.
"Construction will be internal, but we will tidy up the roof, and we are putting another floor on there.
"Courtenay Street is a bit messy, we'll tidy that up and put some new build in there."
Mr Morris said the deal to buy the building was confidential but involved "a lot of cash".
When Aberdeen Property Investors bought it in 2010 it was for more than £20million.
But Mr Morris did say the entire project, including purchase and redevelopment, would top £50million.
He said the aim is "to transform that part of the city", an area blighted by closed-down shops and stemming from the days of recession.
"I think there will be more life in the place with 600 people in there," he said.
Mr Morris said Thames Bank Property was involved in the development of several listed buildings in London.
He said the Derrys block was an attractive building and added: "I love the building and design."
Last year The Herald revealed that the Co-operative group was still paying close to £1million every year, in rates and Business Tax, as leaseholders of the vacant Derrys department store.