UK-focused hotel owner and manager Shiva Hotels Group has secured a £230 mln (€252 mln) development financing package from property finance firm Cale Street Investments and UK investment firm Crosstree Real Estate Partners to fund the construction of a luxury hotel in Marylebone, London.
Agreed during the Covid-19 pandemic, the transaction represents one of the largest recent development facilities for a Central London hotel, according to Shiva.
Cale Street is providing £160 mln and Crosstree £70 mln of the initial four-year facility, which has an option to extend and refinances an £80 mln loan that was in place with ICG Longbow. The loan represents Shiva's first transaction with Cale Street and Crosstree.
The asset, a former NCP-operated car park, is situated close to the new Bond Street Crossrail station, with frontage to both Welbeck Street and Marylebone Lane. The development will create a 199-key property
featuring multiple restaurants, a rooftop swimming pool and a subterranean event space.
Rishi Sachdev, managing director of Shiva Hotels, commented: 'This is a major milestone for our Marylebone Lane development, and brings the delivery of what we believe will be one of London’s most iconic hotels one step closer.
'Securing this package, particularly in the current economic climate, is a further endorsement of our vision to create an unrivalled luxury lifestyle hotel brand and we are extremely excited to be partnering with both parties.'
John F Hunt, the construction specialist, has been appointed to undertake demolition site ground works as well as the initial substructure and frame construction works, with the main contractor to be appointed early next year. The first guests are due to be welcomed in early 2023.
Shiva is also working on two further development sites, Morley House on Holborn Viaduct and the former Soho Works site on Great Marlborough Street and Poland Street. In addition, The Guardsman, off Buckingham Gate, and Middle Eight, in Covent Garden, are scheduled to open to guests this autumn.
'This is a challenging time for everyone involved in the hospitality sector and our near-term focus continues to be on working closely with all our stakeholders to navigate through this period of uncertainty. Longer-term however, we are steadfast in our conviction that the global appeal of London will continue and that this will translate into strong demand for our carefully curated hotels in highly desirable locations,' Sachdev added.
Peter Robinson, a Partner at Crosstree, said: 'Given the current dislocation in real estate financing markets for projects of this type, Crosstree together with Cale Street are pleased to be working with Shiva in taking forward this prime hotel development.
'While no doubt we are currently in a challenging period for the hospitality industry, we share a longer term vision of the resilience of London and high quality real estate and locations such as this.'
BBS Capital acted as debt advisor for Shiva Hotels.
