Leumi UK has provided a £26.3 million loan to Zorca, a subsidiary of investment company Orca, for the purchase, refurbishment and merging of two hotels in London into one luxury hotel.
The £26.3 million loan will part-fund the purchase and refurbishment of two Grade II-listed hotel assets located near Russell Square and adjacent to the British Museum in Bloomsbury. The hotels will be transformed into one luxury 74-bed hotel, complete with events space, a bar, a restaurant and gardens which back onto the British Museum.
The new luxury hotel is expected to open in late 2024.
Leumi UK previously provided finance for the acquisition of the Zetter Group hotels.
CBRE acted as valuers. Bird and Bird acted as Leumi UK’s legal counsel.
Why it matters
The London hotel market, particularly the luxury segment, has recovered considerably post pandemic despite macro-economic headwinds and inflation.The challenge now will be keeping this up given the squeeze facing consumers. The capital has no shortage of luxury hotels so the owners will have to make sure it can stand out in a crowded field.
What they said
James Greenwood, relationship director at Leumi UK said: “Now is an excellent time for Orca to be embarking on the refurbishment of these historic luxury hotels. When the two hotels re-open as one entity it will be in a stronger hotels market which we expect to have overtaken pre-Covid revpar. With an expected surge in demand in the area following the completion of Crossrail, the hotels have a bright future ahead.”
Laith Pharaon of Orca Holding said: “Despite the increase in VAT, London has continued to deliver its highest level of profitability since the start of the pandemic. Having worked with Leumi UK before, we know that the team's deep knowledge of the market as well as their attentiveness to our company values made them the perfect partner for bringing this deal to fruition.”