Mactaggart Family & Partners, the majority owner of The Resident hotel group, has secured a five-year £55 mln (€63 mln) loan from NatWest.
The company will use the debt facility to refinance their Freehold owned, operational assets in Covent Garden, Kensington, Liverpool and Soho.
Additionally, the loan will provide stability enabling MF&P to focus on expansion through further development projects and acquisitions.
The company sees increasing opportunity in the market, including the potential for growth through management contracts.
William Laxton, CEO, MF&P said: ‘I am delighted that we have reaffirmed our successful relationship with NatWest with a perfectly fit-for-purpose senior financing that allows us to concentrate on the growth of the business, which is developing into one of our major strategies. Not everyone in the hotel sector will benefit from such a strong relationship with their lender and we expect to see the ramifications of this play out in the next couple of years. Many groups in the market will be finding themselves over-leveraged, particularly from a cash flow and debt service perspective, and this will mean some difficult conversations, which we expect to drive an increase in transactions, most notably where there is not the capacity to pay down senior and create a more stable capital stack with debt service headroom. We also anticipate that owners will be looking for more efficient business models, as operational pressures grow. The Resident model delivers a highly-rated, revenue driving product which, through features such as limited F&B, has simplified and lower risk operations that converts through to EBITDA very efficiently.’
Last year, MF&P announced the sixth Resident location, with a new site in Edinburgh due to open in 2024, while another 125-bed London development has also been secured.
In addition to further developments, JVs and acquisitions, the brand is planning to add 1,500 to 2,00 rooms through management contracts over the next seven years.
