The owners of the former Moorfield Hotel site in Brae have enquired about the viability of building 20 houses on the land.
BDL Hotels director Stewart Campbell said they were “open to all ideas” for the site – but said it was unlikely to be a hotel again.
The likelihood is that it will be a residential site, Mr Campbell said, which could play host to “one big, large house” or 20 terraced houses instead.
BDL have made a pre-development enquiry with Scottish Water about what effect building 20 houses on the site would have on the water network.
Hjaltland Housing Association have shown an interest in building houses on the site, according to Mr Campbell – but he said that would only be “two or three years away”, because of Hjaltland’s focus on the Staney Hill housing development in Lerwick.
Asked whether Hjaltland were interested in acquiring the Moorfield site, chief executive Bryan Leask just said: “Not at this time”.
Mr Campbell said BDL Hotels had been “trying to get a quick sale a couple of months ago”, but were now in “no rush to do anything” with it.