Multi-million pound deal to fund new 120-bed Soho hotel
Leisure operator Z Hotels has closed a £7.3m debt finance deal with entrepreneur bank OakNorth.
The loan will fund the company’s newly opened Z Tottenham Court Road hotel, a 120-bedroom venue on Poland Street in Soho.
Z Hotels will also submit planning applications for several new sites as it looks to its next phase of development.
The latest £7.3m loan is in addition to an existing £15.2m OakNorth facility that Z Hotels is using to develop new venues in Covent Garden and Holborn.
Jonathan Raymond, director at Z Hotels, said: “The UK has become more attractive than ever to international visitors and Brits opting for ‘staycations’ due to the pound being worth a fifth less than it was before the Brexit vote.
“On any given day, London’s hotels now experience 80% occupancy rates, and we’re in the very fortunate position to have even higher figures than this across all of our sites.”
He continued: “We are delighted to be working with OakNorth to take our growth plans forward. We had worked with the team before so knew they had a thorough understanding of our business and the market, and that they could operate quickly and efficiently.”
OakNorth’s senior director of debt finance, Deepesh Thakrar, commented: “Since our launch in September 2015, we have worked on a number of deals in the hotel sector – from mergers and acquisitions, to buy-outs and development.
“Z Hotels has a proven track record, an excellent business model, and a management team with over four decades’ experience.”
Deepesh continued: “Their unique concept has already proven to be extremely successful, enabling them to achieve much higher occupancy rates and margins than their peers. It is a high-growth and ambitious business that we are keen to support with further expansion.”
Z Hotels was founded in 2011. The company’s portfolio is currently made up of 800 bedrooms across eight hotels.