Leumi UK, the London-based subsidiary of Israel’s international bank Leumi, has completed a deal to provide £27 mln (€31 mln) to refinance the development costs for the Grand Hotel, Birmingham, the city’s only five-star hotel.
The five-year facility will help finance both the opening and stabilisation costs of the Grand Hotel, which was acquired in 2017 by funds managed and controlled by the global private investment firm the Starwood Capital Group.
The Grade II-listed, 185-room hotel is due to undergo its grand reopening in May this year, which will include the opening of the hotels’ cocktail bar, Madeleine, and New York-style brasserie, Isaac’s.
The deal marks Leumi UK’s first transaction involving funds managed and controlled by Starwood Capital. Starwood Capital has a primary focus on global real estate and, since its inception in 1991, has raised over $55 bn of equity capital. Starwood Capital currently has over $75 bn of assets under management, including properties within every major real estate asset class.
In recent months, Leumi UK has provided over £135 mln in new hotel financing, with transactions including providing development finance for Manex Properties’s new Amano Hotel in Covent Garden, refinancing for Crimson Hotels’ investment in the 100 Queen’s Gate Hotel London, Curio Collection by Hilton as well as providing finance for the acquisition of the Zetter Group by Orca Holdings.
‘The fact we have been able to secure such a high profile new-to-bank client while we are still under lockdown is a real testament to the strength and hard work of our hotel finance team. While Covid-19 has caused temporary disruption to the hotel market, we remain confident in the long-term demand for high quality accommodation in city centre locations,’ said Stephen Welch, Senior Relationship Manager, Hotel Finance at Leumi UK.
