SOUTHAMPTON is set to get another branded hotel after a key derelict city centre site changed hands for £7.4m The deal will see the Mayflower Plaza site off Havelock Road turned in a £70m development with a hotel, homes and offices fronting the park.

Terrace Hill, an Aim listed development and investment company, snapped up the 1.7 acre site, which has stood empty since the 1980s.

Development executive Richard Myers said several branded hotel chains were keen to move to the site. He said a three or four star hotel with about 150 beds is planned.

"It is without a doubt the best site available in Southampton: in close proximity to the railway station and park," he said.

"We are very positive about what we can provide and we're working hard with the local authority to produce it."

Mr Myers said he was confident the scheme would be built after previous attempts were held up because residents on Commercial Road had an injunctionable right to light. It restricted the height of any development.

Mr Myers said this issue was now resolved through the council.

He said a planning application would be submitted in October 2007.

If consent is granted, the project will be completed in 2010 with an end value of £70 million.

The city has recently seen plans for a towering 21-storey four-star 204-bed Radisson hotel approved by planners, while a 124-bed budget Etap hotel is to open off West Quay Road by the end of the year.

A four-star 225-bedroom deluxe hotel is also planned for Ocean Village.

They will add to that the 850 new beds that have arrived in the city since 2001.

Gavin Elliot, chairman of the Southampton and Region Hoteliers' Association, said: "There seems to be a buoyant market at the moment but we will reach saturation level if there is no new business coming into the city. That's the concern."

Mr Elliot added the market was polarising into top end and budget hotels and said the Mayflower Plaza hotel was more likely to be a four-star.

The last scheme for Mayflower Plaza involved a 15-storey tower block with offices, 196 flats and two restaurants.

Clerical Medical Investment Group got planning permission in December 2004 but it was never implemented. The council intervened earlier this year to sell the land on to Terrace Hill.