Shiva Hotels Group has secured £230m worth of development finance from Cale Street Investments and Crosstree Real Estate Partners to build a luxury hotel in Marylebone, London.
The two real estate investment firms are providing the funding to the UK-based hotel owner and manager to support the construction of a 199-key ‘luxury lifestyle hotel’ through to completion.
BBS Capital acted as debt adviser for Shiva Hotels and, of the initial four-year facility, Cale Street and Crosstree are providing £160m and £70m, respectively, with an option to extend.
It refinances an £80m loan that was in place with ICG Longbow.
The Marylebone Lane Hotel is one of the latest luxury lifestyle hotels being pioneered by the group, with first guests set to be welcomed in early 2023.
Since acquiring the site — which was previously an NCP-operated car park — Shiva Hotels has worked with Westminster City Council and local interested parties to secure planning consent, which features multiple destination restaurants, a rooftop swimming pool, and a subterranean event space.
Construction specialist, John F Hunt, 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.
“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,” said Rishi Sachdev, managing director of Shiva Hotels.
“Cale Street and Crosstree are both hugely experienced and highly selective real estate financiers and bring a deep understanding of the UK hospitality sector.
“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.
“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.”
Peter Robinson, a partner at Crosstree, added: “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.”