‘Compact luxury’ hotel chain to open new Leicester Square site via £23m co-loan

OakNorth, the neobank for entrepreneurs, by entrepreneurs, and real estate funding specialist, and ASK Partners (“ASK”) have provided a £23m co-loan to ‘compact luxury’ hotel chain, Z Hotels.

Founded by Bev King, Z Hotels launched its ‘compact luxury’ accommodation model in London with the opening of Z Soho in 2011. Since then, the hotel chain has experienced continued success with 14 sites now operational, including 11 in London and one each in Liverpool, Bath, and Glasgow, offering over 1,700 rooms.

The group has been a long-standing customer of both OakNorth and ASK, most recently securing a loan with OakNorth in June this year to refinance an existing loan, as well as fund the construction of an additional 20 rooms at its Piccadilly location. ASK also provided funding for the group’s Trafalgar Square hotel.

The latest facility announced today marks the inaugural co-loan from OakNorth and ASK Partners to Z Hotels and will be used to acquire and refurbish a mixed-use building, consisting of a ground and basement floor with restaurant/retail use and four storeys of office use accommodation above ground floor, plus a fifth-floor attic.

The building, located along Charing Cross Road and a short walk from both Leicester Square and Trafalgar Square, will be converted into Z Hotels’ latest offering and, subject to planning, is expected to have a minimum of 81 rooms and a maximum of 95 rooms. The site is centrally located and within walking distance of many of London’s main tourist attractions.

Commenting on the deal, Bev King, CEO at Z Hotels, said: “Our guests predominantly want to spend a couple of nights in a city centre location either for business or pleasure, to explore the city, and to sleep in generously designed surroundings.

“This new site situated on Leicester Square’s doorstep embodies this demand perfectly, providing our residents with compact but well-designed bedrooms at affordable prices.

“Our relationship with OakNorth and ASK now spans multiple transactions and we see them both as key funding partners who we know we can rely on to support our ambitious growth targets.”

Deepesh Thakrar, Senior Director, Debt Finance at OakNorth, added: “Z Hotels is now one of our longest standing customers and we’re delighted every time we have the opportunity to support its best-in-class team.

“The group is an incredibly experienced hotel operator that continues to focus on delivering high-quality rooms and a premium visitor experience, that’s demonstrated through its average occupancy rate of 96 per cent across all its hotels.”

By Matthew Neville – Senior Correspondent, Bdaily

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