Bank syndicate approves £135 million loan for London Corinthia hotel

A bank syndicate led by Barclays had approved a £135 million loan to Malta-based International Hotel Investments to acquire and develop the Metropole Building on Northumberland Avenue and the adjoining 10 Whitehall Place in London into a 300-bedroom deluxe five-star Corinthia Hotel and a suite of luxury apartments.

The other members of the syndicate include the Libyan Foreign Bank, the Arab Banking Corporation and Bank of Valletta.

“Given these challenging times, the bank loan in itself represents a major sign of confidence in the developers, the project and the UK luxury hotel market generally,” IHI said.

The bank loan matches the £135 million invested as equity by the developers, setting a 50:50 loan to equity gearing on the project.

The Metropole Building and 10 Whitehall Place were acquired from The Crown Estate last year by a consortium owned equally by IHI and two of its principal shareholders, the Libyan Foreign Investment Company and Nakheel Hotels of Dubai.

IHI is now set to transform what was the original Metropole Hotel from the 1880s and subsequently part of the Ministry of Defence, into one of the Capital’s most exceptional luxury hotels, having 300 bedrooms with room sizes averaging 45 square metres, including multi-level penthouse suites and terraces affording spectacular views of the River Thames, Trafalgar Square and Whitehall. The property will also include a large central courtyard foyer, two clusters of restaurants, a destination bar, a ballroom restored to its original splendour and meeting facilities.

The adjoining 10 Whitehall Place property will be redeveloped to include a 2,500 square metres luxury spa operated by ESPA, as well as a suite of 12 exclusive residences ranging from 250 square metres up to over 1000 square metres. The project is targeted for completion by the end of 2010.