HFF Announces £10m Financing for the St Johns Hotel in West Midlands, Uk
HFF Real Estate Limited (HFF) announces the £10 million acquisition financing for The St Johns Hotel, a 180-room hotel located in the West Midlands town of Solihull, United Kingdom, in a deal backed by Allied Irish Bank (GB).
The HFF team worked on behalf of the borrower, Singapore-based fund manager CL Capital, to place the five-year, floating-rate loan with Allied Irish Bank (GB). Kew Green Hotels will manage the hotel.
The St Johns Hotel features the full-service Tempus Restaurant & Bar; 13 flexible event spaces and suites for meetings, parties and weddings; and health club with fully equipped gym, sauna, steam room, trainers and swimming pool. Situated on 3.4 acres at 651 Warwick Road, The St Johns Hotel is located in Solihull, the most affluent town in the West Midlands area of England, and approximately 13 kilometres southeast of Birmingham's city centre.
The U.K. economy has weathered numerous political events over the last two years and, not withstanding some initial volatility in the market, the economy has been resilient. Inbound tourism to the U.K. grew five percent in 2014 and 2015 and an additional 1.6 percent in 2016 to reach 36.7 million in 2016*.
As of the year ending 2016, the U.K. stock of hotel rooms stood at 627,000, with London making up 23 percent of the market, or 146,000 rooms, and with the regional U.K. constituting the balance (77 percent of the stock of 481,000 rooms). Total supply for 2017 is 18,600 rooms (61/39 split between regional U.K. and London, which is a bit higher than the historical figures from 2010-2016 where supply averaged 14,000 rooms the past year). Despite the new supply, U.K. occupancy has increased from 72 percent in 2012 to 77 percent in 2016 due to demand outstripping supply*.
The HFF team representing the borrower included managing director Claudio Sgobba and senior director Edward Bradford.
“It was an absolute pleasure to work with the team at Allied Irish Bank (GB) and CL Capital to arrange this financing,” Sgobba said. “There is an opportunity to drive room revenues by upgrading the room stock. The hotel is currently trading below its competitive set, but with some good asset management, we are confident CL Capital will unlock the hidden value and generate outperformance.”
“We are delighted to have worked with CL Capital and to support their expanding presence in the U.K. hotel market,” Bradford added.
“Allied Irish Bank (GB) is delighted to be supporting this transaction,” said Trish McNicholas, senior relationship manager at Allied Irish Bank (GB). “The quality of the team at CL Capital, the hotel operation and plans proposed, including skilled operators Kew Green Hotels, who we know very well, combine well together, and we believe that The St Johns Hotel Solihull has great potential.”
About Allied Irish Bank (GB)
Allied Irish Bank (GB) is a niche, sector focused business bank which specialises in delivering relationship driven service to medium to large sized businesses. It operates from 16 locations in major business centres across Great Britain, employing over 600 staff.
Allied Irish Bank (GB) has been supporting businesses in Britain with true relationship driven service for over 40 years. During this time, the bank has grown organically with more than half of new business coming from existing customer recommendations.
Allied Irish Bank (GB) was awarded ‘Best Service from a Business Bank' at Business Moneyfacts Awards in 2014, 2015 and 2016.
The AIB logo, Allied Irish Bank (GB) and Allied Irish Bank (GB) Savings Direct are trademarks used under licence by AIB Group (UK) p.l.c. incorporated in Northern Ireland.
Registered Office 92 Ann Street, Belfast BT1 3HH. Registered Number NI018800. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
For further information on Allied Irish Bank (GB), visit aibgb.co.uk.
About Kew Green Group Ltd.
Kew Green Hotels was formed in September 2001 to operate high quality limited and full service branded hotels in prime locations throughout the U.K. The company now operates over 50 hotels in key cities including London, Glasgow, Leeds, Liverpool, Birmingham, Manchester and Portsmouth. Most of the hotels are operated under franchise agreements with some of the world's leading hotel brands including Holiday Inn, Crowne Plaza, Holiday Inn Express, Courtyard by Marriott, ibis Styles and Hampton by Hilton. Kew Green Group also manage the Richmond Hill Hotel, a four-star unbranded Georgian hotel in West London.
The company operates hotels under a variety of funding models including freehold ownership, leases, joint ventures with financial institutions and management contracts. Over the years, the company has won many awards in recognition of the operational excellence it strives for. For further information, please visit kewgreen.co.uk.
HFF and its affiliates operate out of 24 offices and are a leading provider of commercial real estate and capital markets services to the global commercial real estate industry. HFF, together with its affiliates, offers clients a fully integrated capital markets platform including debt placement, investment advisory, equity placement, funds marketing, M&A and corporate advisory, loan sales and loan servicing. HFF, HFF Real Estate Limited, HFF Securities L.P. and HFF Securities Limited are owned by HFF, Inc. (NYSE: HF). For more information, please visit hfflp.com or follow HFF on Twitter @HFF.
*Statistics from Source: UK hotels forecast update 2017 (PwC), September 2017; and AM:PM database (AM:PM), February 2017.