A joint venture between developers Union Hanover Securities and Southern Grove, has acquired Black Lion House office block in London’s East End, which they will now convert into a 220-bedroom boutique hotel and rooftop restaurant in a £16m development plan.
Located on Whitechapel Road, the nine-storey, 75,000sq ft property will become the flagship hotel for the joint ventures extended-stay hotel concept Urban Villa.
Earlier this summer Hanover announced another joint venture with Starboard Hotels, purchasing land on the site of the former London 2012 Olympic Games where it will now build an 18-storey hotel complex which will also become an Urban Villa aprthotel. The companies now have ambitious plans for a roll out of the four-star brand across the UK.
Offering flexible hotel rooms with self-catering facilities, extended-stay is one of the fastest sectors of growth in the US and Asian hotel markets. The hotels are attractive to corporate residents during the week and leisure guests at weekends and the hybrid of ‘serviced apartment’ and ‘hotel’ tends to have lower overheads and longer occupancy for the operator, thus delivering higher margins.
New York-based architects Grzywinski & Pons and hotel specialist Dexter Moren Associates have been appointed to develop the Black Lion House hotel, which is expected to open next year.
The restaurant at the hotel has yet gained an operator but developers have been exploring various options including some preliminary discussions with New York-based chefs.
Topland Group, headed by Sol Zakay, provided the senior debt for the £16m acquisition. The details of the deal were not disclosed but it is understood that Topland provided the loan on a 76 per cent loan-to-value basis, while BridgePoint Ventures and EquityBridge Asset Management arranged the balance of the required funding.