The premium student accommodation development will involve the demolition of existing buildings and the construction of a purpose-built, studio bed scheme with communal facilities.
This development is part of a wider mixed-use scheme comprising a hotel and 52 residential units being developed by Peveril Securities.
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Paul Hadaway, chief executive of Empiric Student Property, said: "We are very pleased to have made this acquisition in the heart of Edinburgh's Old Town.
“This acquisition is in line with Empiric's investment criteria and returns profile."
Empiric will market and let the scheme through the Hello Student operating platform.
The property is located opposite Edinburgh Castle, is close to the Grassmarket area of the city and is a 10-minute walk from the University of Edinburgh's main campus.
The development will become Empiric's second property in Edinburgh, increasing the total size of its portfolio in the city to 254 beds.
The development is expected to be completed in time for the 2019/20 academic year.
Once finished, the property will undergo a post-completion valuation.