A former post office building, in the capital of Wales, being transformed into a 165-bedroom luxury hotel is to be funded by Legal & General (L&G).

The UK insurer said it has agreed to fund the restoration of the building on Westgate Street in Cardiff through a joint venture with the Welsh Rugby Union (WRU) and property developer Rightacres Property (RAP).

L&G is investing an undisclosed amount in The Westgate Hotel scheme on behalf of Legal & General Retirement Institutional, as part of its ongoing investment into the regeneration of Central Square.

The building, designed in 1893 and opened in 1897, was the first building in Cardiff constructed of Portland stone.

The development will restore, preserve and enhance the building’s historic features to include 165 bedrooms, fifteen VIP suites, two restaurants as well as meeting facilities and a ballroom for 400 guests.

The development will also include the former Inland Revenue building, later known as the County Court, originally constructed in 1904.

Subject to planning and listed building consent, construction work will begin in June this year with the Hotel scheduled to open in December 2020.

Tom Roberts, head of strategic investment at Legal & General said: “It is a unique opportunity to create a rare long income cashflow while facilitating the development of a new market-leading hotel in one of the fastest growing capital cities in Europe and top UK cities with the added advantage of being adjacent to the Principality Stadium.

“There are also clear benefits to having a hotel of this quality alongside our substantial current investments in Central Square.”

Martyn Phillips, chief executive of the WRU, said: “Principality Stadium is internationally recognised as an iconic destination for rugby, other sports, music and other live events by fans from around the world.

“Developing this new hotel will allow us to diversify and supplement our current Stadium-based hospitality and conference offering with the additional revenue generated through this business re-invested back into the game at all levels.”

Paul McCarthy, Chief Executive of RAP said: “There is no doubt that central Cardiff has been missing a luxury hotel for a long time and this is a special opportunity to bring activity and vibrancy back into the iconic post office building.

”Given that this project involves the restoration of an historic building, each guestroom will have its own unique layout with distinct features including the original turrets, eaves, windows and skylights.”