Following the acquisition last year from The Crown Estate of the iconic Metropole building on Northumberland Avenue and the adjoining 10 Whitehall Place, in London, International Hotel Investments plc has since secured full funding and commenced works for the refurbishment of both buildings into a luxury hotel and private residences.
Construction on site is proceeding apace and, last week, bank funding was secured by way of a £135 million loan raised from a syndication of banks led and arranged by Barclays. The other members of the syndicate include the Libyan Foreign Bank, the Arab Banking Corporation and the 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," a company statement 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 was set up in 2000 as a publicly-listed holding company for the ownership, development and management of Corinthia Hotels and other commercial real estate worldwide.
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 London'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-metre 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.
Since its inception, IHI has built a valuable €1 billion portfolio of owned hotels, as well as retail space and offices in various countries, including landmark properties which the company has acquired and developed in St Petersburg, Prague, Budapest, Tripoli, Malta and Lisbon. The Corinthia Hotel & Residences in London is the company's first UK venture.
Alfred Pisani, chairman of IHI, founded Corinthia Hotels in 1962, when he established one of Malta's first five-star hotels. Despite the company's expansion in the intervening years, Corinthia Hotels has remained a family-inspired organisation where vision, hard work and people are at the core of the company's values. Discussing the move into the UK marketplace, Mr Pisani commented:
"Entering the UK market has been a target for us for many years. We believe that this redevelopment project - at this time - and in what will be one of London's iconic hotels - will reap tangible immediate and long-term rewards not only by virtue of the investment itself, but also in widening the appeal of our Corinthia Hotels brand into this world capital".
Bob Silk, Hospitality and Leisure Director, Barclays Commercial, said the landmark deal was affirmation that the Bank continued to support new lending within the sector, and in particular lending to high quality management teams with a strong track record of success.
"This is a flagship deal for the sector, and Corinthia Hotel's intention to open their first UK property should be viewed as a major vote of confidence in London's ability to attract high net worth visitors from around the globe."